chocolatetortoise432

Multiple Choice (2 points each)

Identify the choice that best completes the statement or answers the question.

____ 16. Government purchases, under the expenditure approach to GDP accounting, do not include:

____ 17. GDP equals $8 trillion. If consumption equals $5.5 trillion, investment equals $500 billion, and government spending equals $1.5 trillion, then:

____ 18. If some non-price level determinant causes total spending to increase, then the effect on aggregate demand will be a:

____ 19. An increase in the U.S. price level will:

(a) The reported GDP overstates the level of economic activity.

(b) It's impossible to calculate the reported GDP.

(c) The reported GDP understates the level of economic activity.

(d) Most people are not reporting their economic activity.

(e) The reported GDP is meaningless.

Super Sales Company is the exclusive distributor for a revolutionary bookbag. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $360,000 per year. The company plans to sell 17,000 bookbags this year.

Required:

1. What are the variable expenses per unit?

2. Using the equation method:

a. What is the break-even point in units and in sales dollars?

b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000?

c. Assume that through negotiation with the manufacturer the Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars? 

Suppose that the current spot exchange rate is €1.50/₤ and the one-year forward exchange rate is €1.58/₤. The one-year interest rate is 6.0% in euros and 5.2% in pounds. You can borrow at most €1,000,000 or the equivalent pound amount, i.e., ₤666,667, at the current spot exchange rate.

i. Show how you can realize a guaranteed profit from covered interest arbitrage. Assume that you are a euro-based investor. Also determine the size of the arbitrage profit. 

ii. Discuss how the interest rate parity may be restored as a result of the above transactions. 

iii. Suppose you are a pound-based investor. Show the covered arbitrage process and determine the pound profit amount.

1. Explain how repurchase agreement transactions provide short-term investments to businesses. In what sense is a repo a collateralized loan?

What would cause a non-binding price ceiling price to increase?

One who accepts the risks inherent in introducing and commercializing a new product or manufacturing process is called

The inverse demand for a homogeneous-product Stackelberg duopoly is P = 20,000 -4Q. The cost structures for the leader and the follower, respectively, are C_L(Q_L) = 2,000Q_L and C_F (Q_F) = 4,000Q_{F. Determine equilibrium output level for both the leader and the follower, determine the equilibrium market price, and determine the profits for both.}

13. What is a virtual enterprise?

A compensating differential refers to differences in

a. human capital levels of workers.

b. signaling differences of workers.

c. nonmonetary characteristics of jobs.

d. All of the above are correct.

According to the Hamermesh and Biddle study, people deemed more attractive than average earn

Select one:

a. 30-40 percent more than unattractive people.

b. about 5 percent more than average looking people.

c. the same as average looking people and 15-20 percent more than unattractive people.

d. 25 percent more than average looking people and 50 percent more than unattractive people.

A firm can earn economic profits in the long run

Select one:

a. only when the market is a monopoly.

b. only when the market is a monopoly or monopolistically competitive.

c. only when the market is monopolistically competitive or perfectly competitive.

d. when the market is perfectly competitive, monopolistically competitive, or monopolistic.

Question 1

Should we buy non-FDA approved products?

Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 37 years from now with a retirement income of $34,000 per month for 20 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $420,000. Third, after he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $750,000 to his nephew Frodo. He can afford to save $4,100 per month for the next 10 years. If he can earn an EAR of 10 percent before he retires and an EAR of 7 percent after he retires, how much will he have to save each month in Years 11 through 30?

Consider four different stocks, all of which have a required return of 19 percent and a most recent dividend of $4.50 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10 percent, 0 percent, and, -5 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 20 percent for the next three years at which point the price of the stock will be $151.

a) What is the price of each stock today?

b) What is the dividend yield for each of these four stocks?

Since the Middle Ages, Islamic finance based on the sharing of risk has been the dominant form of financing investment and trade. Accordingly, the Geniza records clearly indicate that trade then was both extensively and intensively financed by risk-sharing partnerships.

a) Explain what is Islam’s perspective on risk-sharing?

b)  How is risk-sharing embedded in Islamic instruments? 

If Walmart purchased water from Hope Springs for sale in its retail stores, containers of water might be temporarily stored in a facility for the receipt, storage, and redistribution of goods. Such a facility is called a(n) __________.

data warehouse

independent channel

distribution center

vendor-managed inventory center

logistics center

Think about what you know about the history of any economy in the world. What country? What time period? Discuss one change that boosted the efficiency of labor (E) in that economy. Did the change boost only the level of E, or the growth rate of E? Discuss

True or False?

1. The demand curve of a perfectly competitive firm is perfectly inelastic. True or False?

2.Total profit of a competitive firm can be found by multiplying profit per unit times the quantity sold. True or False?

3.A monopolistically competitive firm can expect to make no more than a fair rate of return (i.e, zero profits) in the long run.True or False?

4.Monopolistic competition has at least one similarity to perfect competition: firms are free to enter and leave the industry. True or False?

5.An oligopolist cares very much what other firms in his industry are doing. True or False?

If consumers believe two goods are homogeneous, the goods are physically identical in every way.

True or false?

Today many companies are envious of Apple's success. But not that long ago, people suggested that the company needed to license its operating system in an attempt to sell more units (at the time they had 3% market share). Explain why such a move could have been disastrous.

What are some of the disadvantages of using real per-capita GDP as a measure of economic development ?

Compare and contrast the global marketing strategies of Samsung, Sony and Phillips after listing two or three elements of each company's global marketing strategy.

Overheard at the water cooler:

In a perfectly competitive market

1.a firm faces a perfectly elastic demand because there is unrestricted entry and exit.

2.if a firm raises its price, it will lose some, but not all, of its customers.

3.when a firm sells another unit of output, the addition to total revenue is equal to market price.

4.all of the above

For each of the following transactions, explain why they would or would not be counted in the GDP of the United States.

a. American auto producer Ford builds a factory in Alberta, Canada.

b. You buy a blueberry muffin at your local coffee shop.

c. A Ford dealership in Ohio has 15 unsold new 2011 model cars at the end of 2011.

If foreign interest rates rise

a. The demand for US dollars rises, causing it to appreciate

b. The demand for US dollars falls, causing it to depreciate

c. The demand for US dollars rises, causing it to depreciate

d. The demand for US dollars falls, causing it to appreciate

Which of the following statements about representative democracies is true?

All citizens participate freely and actively in political processes.

Citizens elect individuals from political groups to act on their behalf.

Representative democracies across the world share identical features.

Leaders of representative democracies can stay in power indefinitely.

9) The board of a U.S. corporation usually includes

A) outside directors.

B) executives of competitors.

C) non-executive employees of the corporation.

D) All of the above.

10) The board of a U.S. corporation usually includes

A) outside directors.

B) company executives.

C) former politicians.

D) All of the above.

13) A firm's profit is

A) usually negative when opportunity costs are included.

B) the difference between marginal revenue and marginal cost.

C) the opportunity cost of the firm's shareholders.

D) the difference between revenue and cost.

Which of the following is an example of an implicit cost for a firm?

Which of the following can help to explain why higher inflation may lead to currency appreciations?

(a) The interest rate is not the prime target of monetary policy.

(b) Most central banks adjust their policy interest rates expressly so as to keep inflation in check.

(c) Central banks increase the money supply leading to overshooting of the exchange rate.

(d) Inflation will increase the purchasing power of a currency.

(e) The world market does not adjust their currency trade to reflect inflation

What does the acronym SMART stands for when referring to goal setting? What is a tangible objective?

What three current national issues do you feel most impact your daily life and/or career?

What's one area of technology that has helped to change the world? Health care related?

Can you explain why that topic of technology you choose has helped changed the world? How?

Why might a family choose not to send their child to school?