Which of the following is false?
A) For bond buyers, the higher the yield the better it is for them.
B) For bond buyers, the higher the price of the bond the better it is for them.
C) For bond buyers, the lower the yield the worse it is for them.
D) The term yield on a bond is the same as the term interest rate on a bond.
B
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A firm is likely to pay higher efficiency wages when:
A) it is easy to monitor workers. B) it is not easy to monitor workers. C) workers do not have a tendency to shirk at work. D) the minimum wages are set above the equilibrium wage rate.
The Weber-Fechner law is the relationship according to which the perceived change in any stimulus:
A. depends upon the ease with which it is possible to summon similar changes from memory. B. varies depending upon whether the change triggers loss aversion. C. varies according to the size of the change measured as a proportion of the original stimulus. D. depends upon an initial approximation, which is then updated in accordance with additional information.
Figure 8.3 shows a firm's marginal cost, average total cost, and average variable cost curves. The average total cost curve is downward-sloping as output increases from Q = 50 to Q = 100 because:
A. increasing average variable cost outweighs decreasing average fixed cost. B. decreasing average fixed cost outweighs increasing average variable cost. C. diminishing returns are not severe enough to outweigh decreasing average fixed cost. D. marginal cost is increasing.
The substitution effect of a wage rate decrease suggests that
A. individuals will supply less work. B. individuals will consume less leisure. C. individuals will supply more work and consume less leisure. D. individuals will supply more work.