The math and graphics used in economics help us better understand the logic of:

The math and graphics used in economics help us better understand the logic of:
 a. verbal reasoning.
  b. rational choice.
  c. hypothesis testing.
  d. business forecasting.

QUESTION 2

If the price of videotapes decreases, then the _____.
 a. marginal utility of videotapes will decrease
  b. marginal utility of videotapes will increase
  c. marginal utility per dollar of videotapes will decrease
  d. marginal utility per dollar of videotapes will increase
  e. total utility of videotapes will increase

QUESTION 3

What do foregone interest on money invested in a firm, wages paid to production workers, interest paid on bank loans, and the purchase of parts for assembly have in common?
 a. All are explicit costs.
 b. All are implicit costs.
 c. All are opportunity costs.
 d. None are opportunity costs.

QUESTION 4

Which of the following describes the relationship between bond prices and bond yields?
 a. There is a positive relationship between the yield and the price.
  b. Every 1 increase in the bond price results in a 2 increase in the yield.
  c. When the bond price is greater than the annual interest, yield is greater than one.
  d. Bond price divided by the bid price is equal to the yield.
  e. There is an inverse relationship between the yield and the price.

QUESTION 5

The assumption of rationality in economics implies that:
 a. people perfectly understand their own preferences.
  b. people can overcome economic obstacles in the best possible way.
  c. people can make accurate calculations and they have a perfect foresight.
  d. people make choices with an eye toward attaining objectives they have chosen.

QUESTION 6

In labor markets, a change in the wage rate has both an income and a substitution effect. An increase in wages causes an increase in real income but at the same time it increases the relative price of leisure for the worker. If an increase in wage rate causes an individual to work less, _____.
 a. the income effect dominates the substitution effect
  b. the substitution effect dominates the income effect
  c. the substitution and income effects cancel each other out
  d. then leisure will be referred to as an inferior good
  e. the increase in wage rates will cause an increase in the supply of labor

QUESTION 7

Which of the following is an implicit cost to Mondo Manufacturing, Inc?
 a. Payments of wages to its office workers.
 b. Property taxes.
 c. Depreciation charges on company owned automobiles and trucks.
  d. Rent paid for the use of equipment.