Pietro is 40 years old and is laid off from his job at the paper plant and borrows from his savings for 8 months until he finds a new job. Pietro's
a. transitory income likely exceeds his permanent income for that year.
b. borrowing is representative of a normal economic life cycle.
c. permanent income is largely unaffected by this one time change to his income.
d. economic mobility during this year is highly unusual, as US workers tend to stay in a particular income class.
c
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Which of the following is FALSE with respect to regulation?
A) Regulated firms commonly try to avoid the effects of regulation whenever they can. B) Firms engage in creative responses which conform to the letter of the law but undermine its spirit. C) Regulation has resulted in state laws that have made creative response illegal in many states. D) Recent regulations have generated feedback effects that undermined the key aim of the rules.
Suppose a monopolist sells 10,000 units of output at $22 per unit. The firm's total revenue is
A) $2,200. B) $22,000. C) $220,000. D) $2,200,000.
Refer to the figure. Suppose the graphs represent the demand for use of a local golf course for which there is no significant competition (it has a local monopoly); P denotes the price of a round of golf; Q is the quantity of rounds "sold" each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, this profit-maximizing golf course should:
A. charge $9 for each round, regardless of the day of the week.
B. charge $7 for each round, regardless of the day of the week.
C. charge $7 for each round on weekdays and $10 during the weekend.
D. charge $9 for each round on weekdays and $10 during the weekend.