A Swiss consumer wants to buy an American car. The exchange rate is 1USD=0.89CHF (Swiss Francs). The car costs 10,000 . How much would the car cost him in Swiss Francs?
a. 12,000 Francs
b. 11,600Francs
c. 8,900 Francs
d. 7,500 Francs
QUESTION 2To signal to your insurance company that you are a low risk individual you should
a. Accept an insurance policy with no co-payments
b. Accept an insurance policy with co-payments
c. Accept an insurance policy with a low deductible
d. None of the above
QUESTION 3Economic Value Added helps firms to avoid the hidden-cost fallacy
a. by ignoring the opportunity costs to using a capital
b. by differentiating between sunk and fixed costs
c. by taking all capital costs into account including the cost of equity
d. none of the above
QUESTION 4An American consumer wants to buy a Swiss watch. The exchange rate is 1USD=0.89 CHF(Swiss Francs). The watch costs 100 Swiss Francs. How much would it cost him in dollars?
a. 89
b. 112.36
c. 100
d. 160.82
QUESTION 5To signal to your insurance company that you are a low risk individual, you should
a. Accept an insurance policy with a high deductible
b. Accept an insurance policy with a low deductible
c. Accept an insurance policy with no co-payments
d. None of the above
QUESTION 6Variable costs are
a. costs that vary with output
b. equal marginal costs
c. not considered in decision-making
d. equal to total costs
QUESTION 7In the case where interest rates are higher in Canada, which of the following is an example of a carry trade
a. Increase borrowing in the US, convert to Canadian dollars and invest in Canada
b. Increase borrowing in the US and invest in the US
c. Increase borrowing in Canada, convert to dollars and invest in the US
d. Increase borrowing in Canada and invest in Canada
QUESTION 8Leaving a handsome tip for the waiter in full view of your dinner date is a
a. Screening mechanism
b. Signaling mechanism
c. Way to waste money
d. None of the above
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