Mini-quiz 4

12 Questions
Mini-quiz 4

National Economics and Finance Management Quiz 2009 - Mini-quiz 4

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Questions and Answers
  • 1. 
    Suppose firm A and firm B produce and sell identical products and face zero marginal cost. Below is the market demand curve for the product. If Firm A and Firm B decide to collude and work as a single monopolist where each firm will produce half the quantity demanded by the market, what will be the economic profit for firm B?
    • A. 

      $500

    • B. 

      $1000

    • C. 

      $2000

    • D. 

      None of the above

  • 2. 
    There are 2 distinct demand curves for admission to the heritage museum. The demand curve for children and senior citizens is given as Pcs = 4 – 0.05Qcs. The demand curve for adults is given as Pa = 9.6 – 0.08Qa. Crowding is not a problem in the museum, so marginal cost is taken to be zero. If the museum is able to price discriminate, what is the optimum price charged in each market?
    • A. 

      Pcs = 0; Pa = 0

    • B. 

      Pcs = 1.5; Pa = 3.2

    • C. 

      Pcs = 2; Pa = 4.8

    • D. 

      Pcs = 2.5; Pa = 5.5

  • 3. 
    In an economy which is initially at full employment, the opportunity cost of an increase in investment is
    • A. 

      The emergence of technological unemployment

    • B. 

      The present consumption forgone

    • C. 

      Inflation arising from operation of the multiplier

    • D. 

      The reduction in rate of return on capital

    • E. 

      Interest charges on the funds for investment

  • 4. 
    When the government imposes a specific tax per unit on a product, changes in demand are __________ and changes in producer surplus are _________.
    • A. 

      Negative, negative

    • B. 

      Positive, negative

    • C. 

      Uncertain, uncertain

    • D. 

      Uncertain, positive

  • 5. 
    A closed economy with no government has a marginal propensity to consume of 0.9. Its full employment national income is $50,000 million. Its current national income is $40,000 million. To achieve full employment, investment must be increased by  
    • A. 

      $1,000 million

    • B. 

      $2,000 million

    • C. 

      $9,000 million

    • D. 

      $10,000 million

  • 6. 
    Firm A, a manufacturing firm takes over firm B a supplier of its raw materials. This is an example of
    • A. 

      Horizontal integration

    • B. 

      Rationalization of production

    • C. 

      Diversification of production

    • D. 

      Vertical integration

  • 7. 
    You invest in 1000 shares of XYZ Company at $1 a share. You expect the shares to rise to $1.25 by the end of the year. However the shares had only risen to $1.10 when you sold them. What is your expected and actual return?
    • A. 

      10% and 25% respectively

    • B. 

      25% and 10% respectively

    • C. 

      30% and 15% respectively

    • D. 

      15% and 30% respectively

  • 8. 
    For CPF members who do not have enough money in their retirement account to meet the Minimum Sum Scheme (MSS) requirement, they can:         i.            Pledge their properties up to 50% of the Minimum Sum       ii.            Use their future CPF contributions (if they are working after age 55) to make up for the shortfall in their Minimum Sum     iii.            Top up their Minimum Sum with cash      iv.            Be granted waiver of the MSS requirement
    • A. 

      I, ii, iii

    • B. 

      I, ii

    • C. 

      Ii, iii

    • D. 

      All of the above

  • 9. 
    Mr Kim purchased 900 shares at $1.50 each. He held the shares for 1 year, during which a dividend of $0.80 per share was paid out. At end of holding period, the shares were worth $1.44 each. How much was his total return?
    • A. 

      $843.20

    • B. 

      49.33%

    • C. 

      82.15%

    • D. 

      $345.50

  • 10. 
    You have just been involved in a motor accident and are considering the actions that you need to take. What is the thing you should NOT do?
    • A. 

      If you have a camera, take photos of the accident scene.

    • B. 

      Avoid discussing liability with the parties involved. Refer all communications from them to your insurer immediately.

    • C. 

      Not contacting your insurer within 24 hours because it is an admission of liability.

    • D. 

      Check whether others are in need of assistance. Stay calm and don’t get angry. Move to the side of the road or somewhere safe.

  • 11. 
    What is Net Asset Value (NAV)?
    • A. 

      It is the net cost of the product

    • B. 

      It is the difference between the selling price and the buying price

    • C. 

      It is the difference between the bid and offer price

    • D. 

      It is the fund’s asset less its liabilities

  • 12. 
    The Effective Interest Rate (EIR) is __________.
    • A. 

      The actual interest you may pay on a loan

    • B. 

      The advertised rate of a loan

    • C. 

      The interest rate that is quoted by the central bank

    • D. 

      Effectively the Singapore Interbank Offer Rate (SIBOR)