Managerial Economics Markets and the Firm 2nd Edition William Boyes ISBN978-0-618-98862-4

Managerial Economics Markets and the Firm 2nd Edition William Boyes ISBN978-0-618-98862-4 Your neighbor throws a huge party for the Super Bowl, and you are invited. Is this a positive or negative externality? A.Positive B.Negative 1 points Question 2 Suppose Apple decides to start making the video chips in-house for its iPhone. Has the firm grown deeper or wider? A.Neither B.Deeper C.Both D.Wider 1 points Question 3 Under a cap-and-trade program designed to control greenhouse gas, suppose the demand for pollution rights increases as the economy improves. What happens to the equilibrium price for the pollution rights? A.Increases B.Does not change C.Decreases D.We do not have enough information to answer this question 1 points Question 4 You buy a new cell phone and pay $3 per month to insure the phone against damage or loss. What potential problem is now faced by the phone company? A.Unassigned property rights B.Free-rider problem C.Moral hazard D.Tragedy of the Commons 1 points Question 5 Suppose a paper plant that emits nasty chemicals into the local water supply finds a way to reduce these emissions. What happens to the S_s and S_p curves in Figure 3.1? A.S_p unchanged and S_s shifts upward B.We do not have enough information to answer this question C.S_p unchanged and S_s shifts downward D.S_s and S_p remain unchanged 1 points Question 6 Suppose your neighbor plays her accordian very loudly for 10 hours per day, and you cannot stand accordion music. What type of externality is this? A.Negative B.Neither C.Positive 1 points Question 7 Suppose the B-school has a help desk on campus where students can ask questions about their assignments in the MBA classes, and the desk is staffed by a single graduate student. Is the resource a common property resource or a public good? A.Both B.Common property resource C.Public good 1 points Question 8 Which of the following is NOT an example of a public good? A.All-you-can-eat buffet B.Concerts in public parks C.Police protection D.Public TV and radio 1 points Question 9 Which type of good is non-excludable? A.Johnny B Goode B.Common property resource C.Public good D.Substitute good 1 points Question 10 The buffalo on the western US plains were nearly hunted to extinction in the 1800’s. Is this a public good problem or a common property resource problem? A.Both B.Common property resource C.Public good 1 points Question 11 Business education credentails like an MBA degree may help you to solve which of the following problems? A.Free-rider problem B.Moral hazard C.Tragedy of the Commons D.Information asymmetry 1 points Question 12 Suppose the new federal health care law increases the marginal costs of in-house activities. How will this affect the share of activities that the firm completes inside the firm? A.We do not have enough information to answer the question B.More in-house activities C.Fewer in-house activities D.In-house activities unchanged by the new law 1 points Question 13 Companies that have an employee ownership program may be using this approach to solve which of the following problems? A.Negative externality B.Tragedy of the Commons C.Principal-agent D.Free rider 1 points Question 14 Which of the following is an example of a principal-agent problem? A.All of these are examples of principal-agent problems B.Your room-mate shirks her obligation to keep the apartment kitchem clean. C.Crab fising boat owner catches too many crabs (over their quota) and sells the excess in the black market. D.Corporate president uses his expense account to speculate in the commodities market 1 points Question 15 The internet has reduced the costs of communication, sharing work, and other transaction costs in business. Has this strengthened the existence of firms or made it easier for workers to operate as independent contractors outside the firm? A.Strengthened the reasons the firm exists B.More favorable for independent contractors

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