Weekly Review Quiz as of 2008-02-07 Economics:Micro

Rising Cost of Iraq War May Reignite Public Debate by Yochi J. Dreazen and John D. McKinnon 02/04/2008 http://online.wsj.com/article/SB120208876974239467.html?mod=djem_jiewr_ecq

1. In the Democrats’ official response last Monday to President Bush’s State of the Union address, Kansas Gov. Kathleen Sebelius complained that the wars in Iraq and Afghanistan “have cost us dearly – in lives lost; in thousands of wounded warriors whose futures may never be the same; [and]

* a) in challenges not met here at home because our resources were committed elsewhere.” b) in tarnished image abroad of the United States.” c) in the unwillingness of young Americans to participate in the upcoming election.” d) in our inability to engage the U.S. military in other international conflicts.” e) in the U.S. manufacturing output lost from placing these soldiers abroad.”

2. Pentagon officials acknowledge that the cost of both the Iraq and Afghanistan wars has risen sharply due to a) the troop surges. b) increases in food and fuel costs. c) better equipment. d) the replacement of ageing military equipment. * e) the troop surges, increases in food and fuel costs, better equipment gear and the replacement of ageing military equipment.

3. President Bush’s proposed federal budget is expected to a) increase spending in all categories that are not security-related, and decrease spending on border security, immigration enforcement and the military. * b) keep a tight lid on costs that are not security-related, and increase spending on border security, immigration enforcement and the military. c) decrease spending in all budget categories. d) increase spending in all budget categories. e) keep the 2008 budget in line with the 2007 budget.

Microsoft Makes Grab for Yahoo by Kevin J. Delaney, Robert A. Guth and Matthew Karnitschnig 02/02/2008 http://online.wsj.com/article/SB120186587368234937.html?mod=djem_jiewr_ecq

4. Microsoft Inc.’s motivation for making a $44.6 billion unsolicited bid for Yahoo Inc. is to a) put Microsoft in a better position in its competition with telecommunication companies. b) begin acquiring all online search engines so as to buttress its monopoly of operating systems. c) lead searchers using Yahoo’s search engine to Microsoft sites. * d) make Microsoft an alternative to Google for advertisers and help buttress Microsoft's core software business against encroachment by Google. e) prevent Google form acquiring Yahoo. Google Offers to Help Yahoo Fight Off Microsoft by Kevin J. Delaney and Matthew Karnitschnig 02/04/2008 http://online.wsj.com/article/SB120206856800138831.html?mod=djem_jiewr_ecq

5. To thwart Microsoft Inc. unsolicited acquisition of Yahoo Inc., it is considered unlikely that Google Inc. would itself bid for Yahoo because

* a) of regulatory concerns. b) Google feels it is likely to dominate the market for online search engines and Yahoo is likely to fail. c) Microsoft’s $44.6 billion bid for Yahoo is too high. d) of the friction between Google Chief Executive Eric Schmidt and Yahoo CEO Jerry Yang. e) Yahoo’s and Google’s business operations are not synergistic.

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