1.Which of the following is correct concerning a risk-averse person?
A.She would not play games where the probability of winning and losing a dollar are the same.
B.She might not buy health insurance if she thinks her risks are low.
C.Her marginal utility of wealth decreases as her income increases.
D.All of the above are correct.
2.Suppose that interest rates unexpectedly rise and that Carter Corporation announces that revenues from last quarter were down but not as much as the public had anticipated they would be down. According to the efficient markets hypothesis which of the these things make the price of Carter Corporation Stock fall?
A.both the interest rate rising and the revenue announcement
B.neither the interest rate rising nor the revenue announcement
C.only the interest rate rising
D.only the revenue announcement
3.
Which of the following is correct?
A.There is consensus among economists that unions are good for the economy.
B.There is consensus among economists that unions are bad for the economy.
C.There is consensus among economists that, on net, unions have almost no impact on macroeconomic variables.
D.There is no consensus among economists about whether unions are good or bad for the economy
4..The BLS reported in 2005 that there were 59.98 million people over age 25 whose highest level of education was a high school degree or equivalent. From this group 36.40 million were employed and 1.93 million were unemployed. About what were the labor-force participation rate and the unemployment rate for this group?
A.60.7%, 5.0%
B.63.9%, 5.0%
C.60.7%, 3.2%
D.63.9%, 3.2%
5.Fundamental analysis shows that Green Leaf Tea Company is fairly valued. Then Green Leaf Tea Company unexpectedly improves its production techniques and unexpectedly hires a new CEO away from another very successful tea producer. Suppose this has no effect on the price of the stock of Green Leaf Tea Company.
A.Fundamental analysis would now show the corporation is overvalued. The fact that the price was unchanged is consistent with the efficient markets hypothesis.
B.Fundamental analysis would now show the corporation is overvalued. The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
C.Fundamental analysis would now show the corporation is undervalued. The fact that the price was unchanged is consistent with the efficient markets hypothesis.
D.Fundamental analysis would now show the corporation is undervalued. The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
6.Labor Stats
The Labor Market
This table shows the 2003 data for males and females ages 16 and over in the imaginary country of Meditor.
1. Not in labor force
a. male: 45 million
b. female: 35 million
2. Unemployed
a. male: 5 million
b. female: 5 million
3. Employed
a. male: 85 million
b. female: 65 million
Refer to Labor Stats. What is the adult male unemployment rate in Meditor?
A.3.70%
B.4.00%
C.5.56%
D.5.88%
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