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Chapter 1: Introduction
3. The economic theory of the firm assumes that the primary objective of a firm’s owner or owners is to:
a. behave in a socially conscientious manner.
b. maximize the firm’s profit.
c. maximize the firm’s total sales.
d. maximize the value of the firm.
e. All of these are primary objectives.
ANS: D DIF: Easy REF: 3 TOP: The Theory of the Firm
MSC: Factual
10. Which of the following would a manager NOT use to create market inefficiencies?
a. Establishing a brand name.
b. Sophisticated pricing strategies.
c. Diversification efforts.
d. Output decisions.
e. Building market entry barriers.
ANS: A DIF: Moderate REF: 6 TOP: Profit
MSC: Factual
11. Managers may make decisions that are not consistent with the goals of stockholders. This is referred to
as the problem.
a. principal–agent
b. economic disincentive
c. incentive–compromise
d. efficiency–inefficiency
e. equilibrium
ANS: A DIF: Easy REF: 7
TOP: Managerial Interests and the Principal–Agent Problem MSC: Factual
12. Managers may choose to pursue goals other than maximization of a firm’s value. This is referred to as
the problem.
a. slacker–shirking
b. neuropathy
c. generation X
d. principal–agent
e. none of the above
ANS: D DIF: Easy REF: 7
TOP: Managerial Interests and the Principal–Agent Problem MSC: Factual
14. As a result of historically high gasoline prices in 2008, traffic volume in the United States (measured in
terms of billions of miles driven per month) declined significantly. These changes were caused by a
of gasoline and .
a. surplus; a decrease in the quantity demanded of gasoline
b. surplus; a decrease in the demand for gasoline
c. shortage; a decrease in the quantity demanded of gasoline
d. shortage; a decrease in the demand for gasoline
e. shortage; an increase in the demand for gasoline
ANS: C DIF: Moderate REF: 7 TOP: Demand and Supply
MSC: Applied
15. The market supply curve shows the quantity of a good or service that , holding other possible
influences constant.
a. households would sell at various prices
b. households would buy at various outputs
c. firms would sell at various prices
d. firms would buy at various prices
e. households would buy at various prices
ANS: C DIF: Easy REF: 13 TOP: Demand and Supply
MSC: Factual
16. The market demand curve shows the quantity of a good or service that:
a. households would sell at various prices.
b. households would buy at various outputs.
c. firms would sell at various prices.
d. firms would buy at various prices.
e. households would buy at various prices.
ANS: E DIF: Easy REF: 13 TOP: Demand and Supply
MSC: Factual
17. The price of computers has fallen, while the quantity purchased has remained constant. This implies that
the demand for computers has:
a. decreased, while the supply of computers has increased.
b. increased.
c. decreased, while the supply of computers has decreased.
d. increased, while the supply of computers has increased.
e. become more volatile.
ANS: A DIF: Easy REF: 13 TOP: Demand and Supply
MSC: Applied
18. J. D. Power, the big management consulting firm, extols the reliability of Dell computers; this causes
the:
a. demand for Dell computers to increase.
b. supply of Dell computers to increase.
c. quantity supplied of Dell computers to increase.
d. quantity supplied of Dell computers to decrease.
e. demand and supply of Dell computers to remain unchanged.
ANS: A DIF: Easy REF: 13 TOP: Demand and Supply
MSC: Applied
19. ConAgra has introduced a lean mixture of cereal and ground beef that is indistinguishable from ground
beef but has about the same amount of fat as chicken. As a result, the:
a. demand for chicken increases.
b. demand for ground beef decreases.
c. demand for chicken decreases.
d. demand for cereal decreases.
e. supply of chicken increases.
ANS: C DIF: Easy REF: 13 TOP: Demand and Supply
MSC: Applied
20. In the following figure, there will be an excess supply at any price:
a. above Pb.
b. below Pb.
c. other than Pb.
d. below Pa.
e. above Pc.
ANS: A DIF: Easy REF: 15 TOP: Equilibrium Price
MSC: Applied
21. In the accompanying figure, the equilibrium price and quantity are:
a. Pa and Qa.
b. Pb and Qb.
c. Pc and Qc.
d. Pa and Qc.
e. Pc and Qa.
ANS: B DIF: Easy REF: 15 TOP: Equilibrium Price
MSC: Applied
22. In the following figure, there will be an excess demand at any price:
a. below Pa.
b. below Pb.
c. other than Pb.
d. above Pb.
e. above Pc.
ANS: B DIF: Easy REF: 15 TOP: Equilibrium Price
MSC: Applied
23. California imposes strict new regulations on the blending of gasoline that increase production costs. As
a result, the:
a. demand for gasoline will increase.
b. demand for gasoline will decrease.
c. supply of gasoline will increase.
d. supply of gasoline will decrease.
e. demand for and supply of gasoline will not change.
ANS: D DIF: Easy REF: 17 TOP: Demand and Supply
MSC: Applied
24. Which of the following would be likely to reduce the demand for residential housing?
a. High prices for residential housing units.
b. High mortgage interest rates.
c. High prices for lumber and other construction materials.
d. Low unemployment rates.
e. Low prices for residential housing units.
ANS: B DIF: Moderate REF: 17 TOP: Demand and Supply
MSC: Applied
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And still he blew a louder blast,
And gave a louder cheer;
“Come, Gelert, why art thou the last
Llewelyn’s horn to hear?
“Oh where does faithful Gelert roam?
The flower of all his race;
So true, so brave: a lamb at home;
A lion in the chase.”
’Twas only at Llewelyn’s board
The faithful Gelert fed;
He watch’d, he serv’d, he cheer’d his lord,
And centinel’d his bed.
In sooth, he was a peerless hound,
The gift of royal John: [166]
But now no Gelert could be found,
And all the chase rode on.
And, now, as over rocks and dells
The gallant chidings rise,
All Snowdon’s craggy chaos yells
With many mingled cries.
That day Llewelyn little loved
The chase of hart or hare,
And scant and small the booty proved,
For Gelert was not there.
Unpleased, Llewelyn homeward hied:
When near the royal seat,
His truant Gelert he espied,
Bounding his lord to greet.
But when he gain’d his castle door,
Aghast the chieftain stood:
The hound was smear’d with gouts of gore,
His lips and fangs ran blood!
Llewelyn gazed with wild surprise,
Unused such looks to meet;
His favourite check’d his joyful guise,
And crouch’d, and lick’d his feet.
Onward in haste Llewelyn past,
And on went Gelert too:
And still, where’er his eyes he cast,
Fresh blood-gouts shock’d his view!
O’erturn’d his infant’s bed he found,
The blood-stain’d covert rent:
And all around the walls and ground,
With recent blood besprent.
He call’d his child; no voice replied;
He search’d with terror wild;
Blood, blood, he found on every side,
But nowhere found the child!
“Hell-hound, by thee my child’s devour’d!”
The frantic father cried:
And to the hilt the vengeful sword,
He plunged in Gelert’s side.
His suppliant, as to earth he fell,
No pity could impart;
But still his Gelert’s dying yell
Past heavy o’er his heart.
Aroused by Gelert’s dying yell,
Some slumberer waken’d nigh:
What words the parent’s joy can tell,
To hear his infant cry!
Conceal’d between a mingled heap,
His hurried search had miss’d;
All glowing from his rosy sleep,
His cherub boy he kiss’d!
Nor scratch had he, nor harm, nor dread,
But the same couch beneath
Lay a great wolf, all torn, and dead,
Tremendous still in death!
Ah! what was then Llewelyn’s pain!
For now the truth was clear;
The gallant hound the wolf had slain,
To save Llewelyn’s heir.
Vain, vain was all Llewelyn’s woe;
“Best of thy kind, adieu!
The frantic deed which laid thee low,
This heart shall ever rue!”
And now a gallant tomb they raise,
With costly sculpture deckt;
And marbles storied with his praise
Poor Gelert’s bones protect.
Here never could the spearman pass,
Or forester unmoved;
Here oft the tear-besprinkled grass
Llewelyn’s sorrow proved.
And here he hung his horn and spear,
And oft, as evening fell,
In fancy’s piercing sounds would hear
Poor Gelert’s dying yell!
And till great Snowdon’s rocks grow old,
And cease the storm to brave,
The consecrated spot shall hold
The name of Gelert’s grave.
Since the author’s first visit, much has been added to the picturesque
scenery of Beddgelert, through the liberal and patriotic spirit of Thomas
Jones of Bryntirion, Esq. the worthy proprietor of this romantic vale. A
most excellent inn has been erected, and no expense spared in
rendering the accommodations for the tourist and the traveller the most
attractive, as well as the most comfortable. It is worthy of remark, that
this spot was selected by the monks as favourable to the desponding
gloom of popish superstition. The parish church, which is situated
within a few hundred yards of this inn, was formerly a part of a priory
of Augustine monks, founded by Anion, Bishop of Bangor, in the
thirteenth century; and supposed by some to be the oldest religious
house in Wales. Part of the cloisters still remain. The monastery was
destroyed by fire during the reign of Edward the First. The present
appearance of the vale is, however, calculated to produce sensations of
a very different description, and presents objects the most alluring to
the lovers of mountain scenery. The tourist, whether he be a poet, a
philosopher, or an antiquary, will here find abundant sources of
recreation to detain him for some days. Within the distance of an
hour’s walk from the inn, are situated
SNOWDON.
We engaged the miner [170] as our conductor over the mountain, who
entertained us much with displaying, in strong colours, the tricks and
impositions of his brother guides. [171]
At half-past twelve we started from our inn, determined to see the sun
rise from its highest summit. The night was now very dark, and we
could just discover that the top of Snowdon was entirely enveloped in a
thick impenetrable mist: this unpropitious omen staggered our
resolutions; and we for some time hesitated respecting our farther
progress; but our guide assuring us that his comfortable cottage was
not far distant, we again plucked up resolution; and, quitting the high
way about two miles on the Caernarvon road, we turned to the right,
through a boggy, unpleasant land, and in danger of losing our shoes
every step we took. This soon brought us to the comfortable cot, the
filth and dirtiness of which can better be imagined than described; a
worm-eaten bed, two small stools, and table fixed to the wall,
composed the whole of his furniture; two fighting-cocks were perched
on a beam, which Thomas seemed to pride himself in the possession
of: the smoke of the fire ascended through a small hole in the roof of
this comfortable mansion, the door of which did not appear proof
against the “churlish chiding of the winter blast.”
Such, indeed, was the situation of this Cambrian mountaineer: and,
though, in our own opinion, misery, poverty, and dirt personified,
seemed to be the real inhabitants of this cottage, yet there was
something prepossessing in his character; for, frequently, with the
greatest vehemence imaginable, and in the true style of an anchorite,
he declared, that, “though he boasted not riches, yet he boasted of
independence; and though he possessed not wealth, yet he possessed
the home of happiness, an honest breast.”
The morning appearing to wear a more favourable aspect, we again
sallied forth; the bogs, however, still rendered it extremely unpleasant.
But this inconvenience was only temporary; we soon came to a part of
the mountain entirely composed of loose stones and fragments of rock,
which affording only a very treacherous footing, you are liable to
perpetual falls. The mountain now became much steeper, the path less
rocky, and our mountaineer, the higher we proceeded, more induced to
exhibit feats of his agility, by occasionally running down a short
precipice, and then, by a loud shout of vociferation, shewing us the
obedience of the sheep, who instantaneously flocked around him at the
sound of his voice: it is singular, the caution implanted in this animal, by
instinct, for the mutual protection of each other; from the liberty they
enjoy, they seldom congregate in one flock, but are generally
discovered grazing in parties from six to a dozen, one of which is
regularly appointed centinel, to watch the motions of their inveterate
enemies (foxes and birds of prey), which infest this mountain. A wider
expanse of the hemisphere disclosed itself, and every object below us
gradually diminished as we ascended. The freshness of the mountain
whetted our appetites; and our conductor, with very little persuasion,
soon influenced us to open our little basket of provisions. The sun, the
“rich-hair’d youth of morn,” was just peeping from his bed; and having
refreshed ourselves, with eager impatience, we again climbed the
rugged precipice; for we had still a considerable height to ascend. We
now passed several steep declivities by a narrow path not more than
three yards wide, with a dreadful perpendicular on each side, the sight
of which almost turned us giddy. As we were passing this hazardous
path, a thick mist enveloped us, and an impenetrable abyss appeared
on both sides; the effect, indeed, can scarcely be conceived; our
footing, to us, puisne mountaineers, seemed very insecure; and a total
destruction would have been the consequence of one false step. The
air grew intensely cold, and, by our guide’s recommendation, we a
second time produced our pistol of rum, diluted with milk; but this
cordial must be used with caution, as a very small quantity of strong
liquor affects the head, owing to the rarefaction of the air. On our
reaching the summit, all our difficulties were forgotten, and our
imaginary complaints overborne with exclamations of wonder, surprise,
and admiration. The light, thin, misty cloud, which had for some time
enveloped us, as if by enchantment, suddenly dispersed; the whole
ocean appeared illuminated by a fiery substance, and all the subject
hills below us, for they resembled mole-hills, were gradually tinged by
the rich glow of the sun; whose orb becoming at length distinctly
visible, displayed the whole island of Anglesea so distinctly, that we
descried, as in a map, its flat and uncultivated plains, bounded by the
rich and inexhaustible Parys mountains, in the vicinity of Holyhead. The
point on which we were standing did not exceed a square of five yards,
and we sickened almost at the sight of the steep precipices which
environed us; round it is a small parapet, formed by the customary
tribute of all strangers, who visit this summit, and to which we likewise
contributed, by placing a large stone on its top; this parapet, indeed,
sheltered us from the chilly cold, and protected us from the piercing
wind, to which this height must naturally be exposed.
We remained in this situation for a considerable time, and endeavoured,
without success, to enumerate the several lakes, forests, woods, and
counties, which were exposed to us in one view; but lost and
confounded with the innumerable objects worthy of admiration, and
regardless of the chilling cold, we took a distinct survey of the Isle of
Man, together with a faint prospect of the Highlands in Ireland, which
appeared just visibly skirting the distant horizon; but another object
soon engrossed all our attention:
The first two miles of our descent we by no means found difficult, but
wishing to take a minute survey of the picturesque Pass of Llanberris,
we changed the route generally prescribed to strangers, and descended
a rugged and almost perpendicular path, in opposition to the proposals
of our guide, who strenuously endeavoured to dissuade us from the
attempt; alleging the difficulty of the steep, and relating a melancholy
story of a gentleman, who many years back had broken his leg. This
had no effect: we determined to proceed; and the vale of Llanberris
amply rewarded us for the trouble.
Mr. Williams, of Llandegai, in his observations on the Snowdon
mountains (which, from his having been a resident on the spot, may be
considered as entitled to the greatest credit,) makes the following
remarks on the probable derivation of their names, and the customs
and manners of their inhabitants.
“It would be endless to point out the absurd conjectures and
misrepresentations of those who have of late years undertaken to
describe this country. Some give manifestly wrong interpretations of
the names of places, and others, either ignorantly or maliciously, have
as it were caricatured its inhabitants. Travellers from England, often
from want of candour, and always from defect of necessary knowledge,
impose upon the world unfavourable as well as false accounts of their
fellow-subjects in Wales; yet the candour of the Welsh is such, that
they readily ascribe such misrepresentations to an ignorance of their
language, and a misconception of the honest, though perhaps warm
temper of those that speak it. And it may be, travellers are too apt to
abuse the Welsh, because they cannot or will not speak English. Their
ignorance ought not to incur disgust: their reluctance proceeds not
from stubbornness, but from diffidence, and the fear of ridicule.
“NATIVES OF ERYRI.
“MODE OF BURYING.
CAERNARVON;
and having crossed a handsome modern stone bridge thrown over the
river Seiont, and built by “Harry Parry, the modern Inigo, A.D. 1791,” we
soon entered this ancient town, very much fatigued from our long
excursion.
The town of Caernarvon, beautifully situated and regularly built, is in
the form of a square, enclosed on three sides with thick stone walls;
and on the south side defended by the castle.
The towers are extremely elegant; but not being entwined with ivy, do
not wear that picturesque appearance which castles generally possess.
Over the principal entrance, which leads into an oblong court, is seated,
beneath a great tower, the statue of the founder, holding in his left
hand a dagger: this gateway was originally fortified with four
portcullises. At the west end the eagle tower, remarkably light and
beautiful, in a polygon form; three small hexagon turrets rising from the
middle, with eagles placed on their battlements; from thence it derives
its name. In a little dark room [186] in this tower, measuring eleven feet
by seven, was born King Edward II. April 25, 1284. The thickness of
the wall is about ten feet. To the top of the tower we reckoned one
hundred and fifty-eight steps; from whence an extensive view of the
adjacent country is seen to great advantage. On the south are three
octagonal towers, with small turrets, with similar ones on the north. All
these towers communicate with each other by a gallery, both on the
ground, middle, and upper floor, formed within the immense thickness
of the walls, in which are cut narrow slips, at convenient distances, for
the discharge of arrows.
This building, founded on a rock, is the work of King Edward I. the
conqueror of the principality; the form of it is a long irregular square,
enclosing an area of about two acres and a half. From the information
of the Sebright manuscript, Mr. Pennant says, that, by the united efforts
of the peasants, it was erected within the space of one year.
Having spent near three hours in surveying one of the noblest castles in
Wales, we walked round the environs of the town. The terrace [187]
round the castle wall, when in existence, was exceedingly pleasing,
being in front of the Menai, which is here upwards of a mile in breadth,
forming a safe harbour, and is generally crowded with vessels,
exhibiting a picture of national industry; whilst near it a commodious
quay presents an ever-bustling scene, from whence a considerable
quantity of slate, and likewise copper, from the Llanberris mine, is
shipped for different parts of the kingdom.
Caernarvon may certainly be considered as one of the handsomest and
largest towns in North Wales; and under the patronage of the Marquess
of Anglesea promises to become still more populous and extensive.
In Bangor-street is the Anglesea Arms hotel, a large and most
respectable inn; where, as well as the Goat, the charges are moderate
and the accommodations excellent.
Caernarvon is only a township and chapelry to Llanbeblic. Its market is
on a Saturday, which is well supplied and reasonable; and with the
spirited improvements made to the town and harbour, has been the
means of greatly increasing its population: according to the late returns
it contains 1008 houses, and 6000 inhabitants. The church, or rather
chapel, has been rebuilt by subscription. Service is performed here in
English, and at the mother church at Llanbeblic [188] in Welsh.
The port, although the Aber sand-banks, forming a dangerous bar, must
ever be a great drawback upon it, has not only been wonderfully
improved, but is in that progressive state of improvement by the
modern mode of throwing out piers, that vessels can now, of
considerable tonnage, lie alongside the quay, and discharge or take in
their cargoes in perfect safety; this bids fair, as may be seen by the
rapid increase of its population and tonnage, to make it a place of trade
and considerable resort: yet still it only ranks as a creek, and its
custom-house is made dependent on that of the haven of Beaumaris, to
the comptroller of which its officer is obliged to report: this must be a
considerable hindrance to its trade, particularly in matters out of the
customary routine. The county hall, which is near the castle, is a low
building, but sufficiently commodious within to hold with convenience
the great sessions. Caernarvon possessed such great favour with
Edward the First, as to have the first royal charter granted in Wales
given to it. It is by that constituted a free borough. It has one
alderman, one deputy mayor, two bailiffs, a town-clerk, two serjeants at
mace, and a mayor; who, for the time, is governor of the castle, and is
allowed 200l. per annum to keep it in repair. It jointly with Conway,
Nevin, Criccaeth, and Pwllheli, sends a member to parliament, for the
return of whom every inhabitant, resident or non-resident, who has
been admitted to the freedom of the place, possesses a vote.
It is allowed to have a prison for petty offences independent of the
sheriff. Its burgesses likewise were exempt throughout the kingdom
from tollage, lastage, passage, murage, pontage, and all other
impositions of whatever kind, with other privileges, too numerous to
insert.
The county prison is likewise near the castle. It was erected in the year
1794. The new market-house, containing the butchers’ shambles, &c.
is a well-contrived and convenient building, affording good storage for
corn and other articles left unsold.
The site of the ancient town of Segontium, which lies about half a mile
south of the present one, will be found worthy the attention of the
traveller; it was the only Roman station of note in this part of Cambria,
on which a long chain of minor forts and posts were dependent. It is
even maintained, and that by respectable authorities, that it was not
only the residence but burial-place of Constantius, father of Constantine
the Great; but most probably this arises from confusing Helena, the
daughter of Octavius, Duke of Cornwall, who was born at Segontium,
and married to Maximus, first cousin of Constantine, with Helena, his
mother, whom these authorities assert to have been the daughter of a
British king. A chapel, said to have been founded by Helen, and a well
which bears her name, are amongst the ruins still pointed out.
Since the numerous late improvements have been going forward at and
near Caernarvon, new and interesting lights have been thrown on the
ruins in its vicinity, which will form a rich treat to the antiquary.
Near the banks of the Seint, from which Segontium took its name, and
which runs from the lower lake of Llanberris, are the remains of a fort,
which appears to have been calculated to cover a landing-place from
the river at the time of high water: it is of an oblong shape, and
includes an area of about an acre; one of the walls which is now
standing is about seventy-four yards, and the other sixty-four yards
long, in height from ten to twelve feet, and nearly six feet in thickness.
The peculiar plan of the Roman masonry is here particularly discernible,
exhibiting alternate layers, the one regular, the other zig-zag; on these
their fluid mortar was poured, which insinuated itself into all the
interstices, and set so strong as to form the whole into one solid mass;
retaining its texture even to the present day, to such a degree, that the
bricks and stone in the Roman walls yield as easy as the cement.
English history has spoken so fully on this place, as connected with
Edward the First, on the title, which he, from his son being born in this
castle, so artfully claimed for him, and the future heirs apparent to the
British throne, as affording to the Welsh a prince of their own,
agreeable to their wishes, and the quiet annexation of the principality
to his dominions, which Edward by this means obtained, that it appears
superfluous to enlarge upon it in this work.
Several excursions may be made from Caernarvon, with great
satisfaction to the tourist; the principal of which is a visit to
PLAS-NEWYDD,
the elegant seat of the Marquis of Anglesea, situated in the Isle of
Anglesea, and distant about six miles from Caernarvon. If the wind and
tide prove favourable, the picturesque scenery of the Menai will be
viewed to great advantage by hiring a boat at the quay. [191] But if this
most advisable plan should not be approved of, the walk to the Moel-y-
don ferry, about five miles on the Bangor road, will prove highly
gratifying. The Menai, whose banks are studded with gentlemen’s
seats, appearing scarcely visible between the rich foliage of the oak,
which luxuriates to the water’s brink, is filled with vessels, whose
shining sails, fluttering in the wind, attract and delight the observing
eye; whilst the voice of the sailors, exchanging some salute with the
passing vessel, is gently wafted on the breeze.
Crossing the ferry, we soon reached the ancient residence of the arch-
druid of Britain, where was formerly stationed the most celebrated of
the ancient British academies: from this circumstance many places in
this island still retain their original appellation, as Myfyrim, the place of
studies: Caer Idris, the city of astronomy; Cerrig Boudin, the
astronomer’s circle. The shore to the right soon brought us to the
plantations of Plâs-Newydd, consisting chiefly of the most venerable
oaks, and noblest ash in this part of the country:
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