FIN REVIEW
CH 1 Quiz
1. Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is $1.23= 1.00 Euros. One year later the exchange rate is the same, but the Italian government has expropriated your firm’s assets paying only 80,000 Euros in compensation. This is an example of
a. Political risk
2. Country A can produce 10 yards of textiles or 6 pounds of food per unit of input. Compute the opportunity cost of adding one additional unit of food instead of textiles.
a. 1 yard of textiles per 6 pounds of food
3. In countries like France or Germany
a. Managers have often viewed shareholders as one of the “Stakeholders” of the firm, others being employees, customers, suppliers, banks, and so forth.
4. The common monetary policy for the euro zone is now formulated by
a. The European Central Bank
5.
What is the relative price of a gun in terms of butter in South Carolina?
a. 1 gun costs 3 butters
6. Using the same chart above, suppose that the citizens of North and South Carolina are currently consuming as much butter as they care to. What is the maximum increase in the number of guns that could occur following trade?
a. 83.33 guns
7. The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I & II). For Case II, in what range must the “international” price of wheat fall? i.e. if North and South Dakota trade only with each other, what is the range of prices possible?
a. Between 1 bushel of wheat = 4/3 bottles of beer and 1 bushel of wheat = 2 bottles of beer
8. A MNC may gain from its global presence by
a. All of the above are potential gains
9. Suppose that you are a US producer of a commodity good competing with foreign producers. You inputs of production are priced in dollars and you sell your output in dollars. If the US currency depreciates against the currencies of our trading partners
a. Your competitive position is
1. Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is $1.23= 1.00 Euros. One year later the exchange rate is the same, but the Italian government has expropriated your firm’s assets paying only 80,000 Euros in compensation. This is an example of
a. Political risk
2. Country A can produce 10 yards of textiles or 6 pounds of food per unit of input. Compute the opportunity cost of adding one additional unit of food instead of textiles.
a. 1 yard of textiles per 6 pounds of food
3. In countries like France or Germany
a. Managers have often viewed shareholders as one of the “Stakeholders” of the firm, others being employees, customers, suppliers, banks, and so forth.
4. The common monetary policy for the euro zone is now formulated by
a. The European Central Bank
5.
What is the relative price of a gun in terms of butter in South Carolina?
a. 1 gun costs 3 butters
6. Using the same chart above, suppose that the citizens of North and South Carolina are currently consuming as much butter as they care to. What is the maximum increase in the number of guns that could occur following trade?
a. 83.33 guns
7. The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I & II). For Case II, in what range must the “international” price of wheat fall? i.e. if North and South Dakota trade only with each other, what is the range of prices possible?
a. Between 1 bushel of wheat = 4/3 bottles of beer and 1 bushel of wheat = 2 bottles of beer
8. A MNC may gain from its global presence by
a. All of the above are potential gains
9. Suppose that you are a US producer of a commodity good competing with foreign producers. You inputs of production are priced in dollars and you sell your output in dollars. If the US currency depreciates against the currencies of our trading partners
a. Your competitive position is
Links: CH 1: http://wenku.baidu.com/view/3ec842717fd5360cba1adb6f CH 2: http://wenku.baidu.com/view/8b188dd5360cba1aa811da6f CH 3: http://wenku.baidu.com/view/43bcc40cba1aa8114431d96f CH 4: http://wenku.baidu.com/view/0b65481aa8114431b90dd86f CH 5: http://wenku.baidu.com/view/84735a114431b90d6c85c76f.html