If bonds and stocks are considered to be substitute goods, and the investors expect stock prices to drop in the near future, _____.
a. the price of bonds will also decline
b. the supply of bonds will increase
c. the interest rate on bonds will decline
d. the demand for stocks will increase
e. the demand for bonds will decline
QUESTION 2Which of the following exempliflies altruism?
a. A teacher conducting night classes for working professionals.
b. A lawyer defending a juvenile client who is accused of murder.
c. A person on his way to work stopping to help accident victims on the road.
d. Government imposing a high sales tax on liquor.
QUESTION 3Buyers who are persuaded to take a product home to try it out, _____.
a. are likely to return the product later
b. are lucky the seller is not concerned about the buyers' credit ratings
c. will not derive any utility from that product.
d. have no money to pay at the time
e. will be reluctant to return the product when payment is due
QUESTION 4Which of the following is false?
a. The total product schedule shows the total amount of output generated as the level of the fixed input increases.
b. The marginal product of any single input is the change in total product resulting from a small change in the amount of that input used.
c. As the amount of a variable input is increased, the amount of other fixed inputs being held constant, a point ultimately will be reached beyond which marginal product will decline. This is called diminishing marginal product.
d. A firm never knowingly allows itself to reach the point where the marginal product becomes negative.
QUESTION 5If the coupon-rate of a particular bond increases:
a. the supply of the bond increases.
b. the price of the bond declines.
c. the demand for the bond declines.
d. the supply of the bond decreases.
e. the demand for the bond increases.
QUESTION 6Utility is a(n) _____ measure of well being of a person.
a. objective
b. subjective
c. ordinal
d. cardinal
QUESTION 7The term _____ refers to the idea that the value people place on money depends on where that money comes from.
a. decision making
b. psychological pricing
c. mental accounting
d. marketing mix
e. anchoring
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