Weekly Review Quiz As of 2008-05-15

Weekly Review Quiz as of 2008-05-15
Economics:Micro

Pain at the Other Pump: Shoe Prices Rise
by Rachel Dodes and Ray A. Smith
05/13/2008

1. After a decade of declining prices, footwear makers at all levels are raising prices due to

* a) rising costs of making shoes in China.
b) higher fuel costs.
c) the weak U.S. dollar.
d) an increase in demand for shoes.
e) rising costs of making shoes in China, higher fuel costs and the weak U.S. dollar.

H-P in Talks to Buy EDS, in Challenge to Rival IBM
by Matthew Karnitschnig, Jim Carlton and Justin Scheck
05/13/2008

2. Hewlett-Packard Co. was close Monday to acquiring Electronic Data Systems Corp. for about $13 billion, setting the stage for

a) heated competition with Dell.
* b) a challenge to IBM’s dominance in computer consulting and services.
c) shifting H-P core competency from manufacturing to consulting services.
d) moving H-P into a better position for government information systems consulting.
e) decreased manufacturing costs and increased overhead costs.

Weak Dollar Crimps Study Abroad
by Kelly Evans and Sara Murray
05/14/2008

3. Many other college students are steering clear of Western Europe and opting for study-abroad programs in Asia, Africa and Latin America because

a) these students feels that Western European experiences are meaningless.
* b) the dollar is especially weak against the euro and pound.
c) U.S. universities are clamping down on the party atmosphere of many study-abroad programs.
d) financial aid packages do not cover European study-abroad programs.
e) more Asian, African and Latin American students are studying in the U.S., and these students want to study in their home countries for part of their undergraduate programs.

AIG Leasing Unit Mulls Split-Up
by J. Lynn Lunsford and Liam Pleven
05/12/2008

4. International Lease Finance Corp., an airplane-leasing giant, is considering a split from its parent company, insurer American International Group Inc.'s (AIG’s), because

* a) ILFC’s executives are concerned that the company is weakened by AIG’s financial woes.
b) ILFC’s executives disagree with AIG’s CEO about investment opportunities.
c) AIG’s pension plan is underfunded.
d) ILFC executives believe that there are no synergies between the company and AIG.
e) AIG no longer wants to be associated with ILFC.

Toyota Net Drops 28% as U.S. Struck Sales Falter
by John F. Murphy and Neal E. Boudette
05/09/2008

5. Toyota Motor Corp.'s net profit for the fiscal first quarter dropped 28% in the first quarter of 2008 in large part because

a) the yen is strengthening.
b) raw material costs are soaring.
c) the U.S. economy has been close a recession.
d) the auto giant expanded its truck manufacturing capacity in the U.S. just before a dramatic shift in American tastes away from trucks and sport-utility vehicles to small cars.
* e) all of the above.