ECO 550 Midterm Exam: Part 1: (Question List)

1. Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include
2. The moral hazard in team production arises from
3. To reduce Agency Problems, executive compensation should be designed to
4. In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return
5. The Saturn Corporation (once a division of GM) was permanently closed in 2009.  What went wrong with Saturn
6. Recently, the American Medical Association changed its recommendations on the frequency of pap-smear exams for women.  The new frequency recommendation was designed to address the family histories of the patients.  The optimal frequency should be where the marginal benefit of an additional pap-test
7. Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds
8. The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
9. The level of an economic activity should be increased to the point where the ____ is
10. The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are
11. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
12. The ____ is the ratio of ____ to the ____.
13. Marginal revenue (MR) is ____ when total revenue is maximized
14. Producers' goods are
15. Those goods having a calculated income elasticity that is negative are called
16. An increase in each of the following factors would normally provide a subsequent increase in quantity demanded, except
17. Which of the following would tend to make demand INELASTIC
18. A price elasticity (ED) of −1.50 indicates that for a ____ increase in price, quantity demanded will ____ by ____.
19. When demand elasticity is ____ in absolute value (or ____), an increase in price will result in a(n) ____ in total revenues
20. The standard deviation of the error terms in an estimated regression equation is known as
21. The estimated slope coefficient (b) of the regression equation (Ln Y = a + b Ln X) measures the ____ change in Y for a one ____ change in X
22. Demand functions in the multiplicative form are most common for all of the following reasons except
23. One commonly used test in checking for the presence of autocorrelation when working with time series data is the ____.
24. In which of the following econometric problems do we find Durbin-Watson statistic being far away from 2.0?
25. When using a multiplicative power function (Y = a X1b1 X2b2 X3b3) to represent an economic relationship, estimates of the parameters (a, and the b's) using linear regression analysis can be obtained by first applying a ____ transformation to convert the function to a linear relationship