A Foreign Exchange Student Bought a Used Car for $10,000

question 206

Multiple Choice

A foreign exchange student bought a used car for $10,000 and resold it one year later for $6,500. Insurance, license, and operating costs for the year were $1,500. What was his economic cost of owning and operating the car for the year if the market rate of interest was 10 percent?

• A) $3,500
• B) $5,000
• C) $6,000
• D) $8,500

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Definitions:

Reaction Formation

A defense mechanism where unacceptable impulses are transformed into their opposite, often in exaggerated form.

Behavioral Form

An observable expression or manifestation of an individual's behavior, often analyzed in psychological studies.

Rationalization

A defense mechanism whereby individuals justify or explain their behavior or feelings in a seemingly logical or rational way, often to avoid confronting the true motives or emotions underlying their behavior.

Intellectualization

A defense mechanism where a person engages in excessive abstract thinking to avoid dealing with emotional issues.