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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What contends that prices of publicly traded assets reflect all publicly available information?
(a) Adverse selection.
(b) The efficient market hypothesis.
(c) The uniform pay scale.
(d) Supply and demand.

2. 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?
(a) $2,500.
(b) $1,000.
(c) $8,700.
(d) $6,000.

3. What is a political thesis of Kim Il-sung which says that the Korean masses are the masters of the country's development?
(a) The Communist Manifesto.
(b) Capitalism.
(c) The Juche Idea.
(d) Marxism.

4. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?
(a) Security.
(b) Recession.
(c) Predictability.
(d) Index.

5. What is the capital of the Democratic People's Republic of Korea?
(a) Honk Kong.
(b) Beijing.
(c) Pyongyang.
(d) Osaka.

6. In finance, what is a debt security in which the authorized issuer owes the holders a debt and, depending on the terms, is obliged to pay interest to use and/or to repay the principal at a later date?
(a) Stock.
(b) Option.
(c) Bond.
(d) Deductible.

7. What does CEO stand for?
(a) Civil Engineer's Office.
(b) Chief Executive Officer.
(c) Continental Energy Options.
(d) Cheap Everpresent Oil.

8. 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) Adverse selection.
(c) Floating exchange rate.
(d) Money market.

9. What does the author refer to as a situation where individuals work in their own best interest, leading to an improved standard of living for society in general?
(a) Communism.
(b) Asset allocation.
(c) Money market.
(d) Capitalism.

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

11. When did the Korean War end?
(a) 1962.
(b) 1966.
(c) 1970.
(d) 1953.

12. Gary Becker was awarded the Nobel Memorial Prize in Economic Sciences in what year?
(a) 1988.
(b) 1992.
(c) 1997.
(d) 2003.

13. What term was first used in the early 1990s to denote an organization's reputation as an employer?
(a) The Juche Idea.
(b) Futures contract.
(c) Employer branding.
(d) Trade-off.

14. When did the Korean War begin?
(a) 1959.
(b) 1950.
(c) 1931.
(d) 1948.

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

Short Answer Questions

1. According to the author in Chapter 2, a horn from a black rhinoceros can fetch what amount on the black market?

2. Gary Becker is a professor of economics, sociology at what institution?

3. What refers to reasoning which constructs or evaluates deductive arguments?

4. What is generally a fungible, negotiable financial instrument representing financial value?

5. What is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect?

(see the answer keys)

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