Weekly Review Quiz as of 2008-07-31
Economics: Micro
Ford Suffers Record Loss as Oil Shock Hits Industry
by Matthew Dolan and Jeff Bennett
07/25/2008
1. The Ford Motor Co. $8.7 billion loss for the second quarter can be attributed to
a) weakening sales of its vehicles in China.
b) declining overall vehicle sales.
c) a shift in demand toward small cars.
d) weakening sales of its vehicles in China and shift in demand toward small cars.
* e) declining overall vehicle sales and a shift in demand toward small cars.
Disney Rumors Spur Money Grab in a ChineseCity
by James T. Areddy and Peter Sanders
07/26/2008
2. In Shanghai, residents of one village are putting up new homes, adding extra rooms and planting new trees because
a) many of the booming city’s successful CEOs live in the village.
* b) the residents expect Disney to locate a new theme park in the village and that real estate compensation to purchase property will be proportional to home size and quality.
c) the village has placed a moratorium on increases in real estate taxes associated with home improvements.
d) a Shanghai housing crises has led to lower construction and home improvement costs.
e) the village’s population is exploding.
British Air, Iberia in Talks to Combine
by Daniel Michaels
07/30/2008
3. The talks between British Airways PLC and Spain's Iberia Lineas Aéreas de España SA about a potential $6.29 billion merger were accelerated by
* a) the threat by AMR Corp.'s American Airlines to acquire BA.
b) rising fuel prices and declining demand for air travel.
c) expected stricter European Union merger requirements.
d) the desire to cut costs by combining fleets under one name.
e) the overlap in their Heathrow and South American routes.
Passing Along Rising Costs Lifts Kraft, Wrigley
by Julie Jargon and Lauren Etter
07/29/2008
4. In spite of rising fuel and ingredients costs, Kraft Foods Inc. and Wm. Wrigley Jr. Co. post strong second-quarter results because
a) the companies defaulted on recent loans.
b) past vertical integration into farming means that the companies were not affected by increases in the prices of ingredients.
c) the increased profits from their organic food divisions made up for the large losses of their conventional food groups.
* d) the companies passed these increasing costs along to consumers by raising prices.
e) the companies have been cutting costs by laying off workers.
Luxury Goods Weathering Economic Woes in U.S.
by Christina Passariello, Rachel Dodes and Stacy Meichtry
07/26/2008
5. Even as many Americans are pulling in their purse strings, spending has been on key categories of
a) SUVs.
* b) luxury goods.
c) European vacations.
d) professional sporting events.
e) South Florida upscale housing.