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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 4-7.

Multiple Choice Questions

1. The Lehman Brothers bank problem in 2008 occurred because the banks weren't what, according to the author?
(a) Paying out interest.
(b) Analyzing risk.
(c) Using their own money.
(d) Keeping enough money on hand.

2. OPEC is an intergovernmental organization of how many oil-producing countries?
(a) 23.
(b) 5.
(c) 12.
(d) 8.

3. The Cuban Revolution deposed what dictator?
(a) Fidel Castro.
(b) Roberto Goizueta.
(c) Fulgencio Batista.
(d) Nicholas Sarkozy.

4. What is an economic model of price determination in a market that concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers?
(a) Supply and demand.
(b) Floating exchange rate.
(c) Money market.
(d) Adverse selection.

5. What is a collective investment scheme that aims to replicate the movements of an index of a specific financial market regardless of market conditions?
(a) Money market.
(b) Futures contract.
(c) Public policy.
(d) Index fund.

Short Answer Questions

1. According to the author in Chapter 2, the average annual income is what in the location where black rhinoceros horns are worth much on the black market?

2. What is a term used in economics that refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information?

3. Gary Becker figured that the stock of skills, education, training and an individual's health constitutes about what percent of a modern economy's wealth?

4. What, according to the author, motivates talented teachers to leave to go onto other professions?

5. Michael Jensen is a professor at what university's business school?

(see the answer key)

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