Exam 1 Practice Problems

Exam 1 Practice Problems - G202 Practice Problems for Exam...

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G202 Practice Problems for Exam 1 I will update these practice problems after any extra credit quizzes (that occur before exam 1) and I may also post some additional questions in here one week before the exam 1 date to make sure that you have at least 25 questions to practice for the exam with…so please check this file often. 1) Economic freedom, as measured by an economic freedom index, has been found to be a) negatively related to entrepreneurial activity. b) positively related to economic growth. c) negatively related to economic growth. d) unrelated to economic growth and entrepreneurial activity. 2) According to our discussion of the Ventria Bioscience case; which of the following was considered to be part of the potential stakeholder allies of Ventria? a) World Health Organization. b) California Secretary of Agriculture. c) Friends of the Earth. d) Anheuser-Busch. ; ; 3) * Given an industry is producing the socially efficient output level, a tax placed on the industry will result in inefficiency because the market will produce a) too many units, as some units produced will have more productive costs than consumer value. b) too many units, as some units produced will have more consumer value than productive costs. c) too few units, giving up some units that have more consumer value than productive costs. d) too few units, giving up some units that have more productive costs than consumer value.
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4) * According to the Napster Case, which of the following statements is not correct? a) Fee-based sites such as Pressplay did not gain popularity because of their restrictions on music use and limited selection of artists. b) Napster based its defense primarily on the Audio Home Recording Act. c) In response to improved electronic technology, like personal CD burners, the recording industry has begun embedding 2 copy-protection on its CDs. d) Industry surveys of Napster users conclusively showed that they significantly decreased their music spending. 5) You are a senior consultant for McKinsey & Company and you are based out of the Chicago office. You have several clients in Los Angeles that demand regular on-site visits. You have a significant amount of family in the LA area, so you often host diners for your family while working on-site and charge the diners to your corporate account as an entertainment expense. What type of conflict of interest is most illustrated within this scenario? a) Misusing employer’s property. b) Moonlighting. c) Post-employment. d) Misuse of inside information. 6) Consider an individual with a current income of $60,000 that is considering committing a crime that has a payoff of $40,000 and a 1/2 probability of getting caught. Based on the standard Becker criminal decision rule, which of the fine amounts listed below is the lowest fine that government could set to be certain that the individual does not have incentive to commit the crime? a)
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This note was uploaded on 04/24/2011 for the course ECON 101 taught by Professor Brentkreider during the Spring '07 term at Iowa State.

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Exam 1 Practice Problems - G202 Practice Problems for Exam...

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