During 2016, Sean's consumption equals $25,000 and the change in his net worth is -$5,000. Sean's economic income for 2012 is
A. $5,000.
B. $20,000.
C. $25,000.
D. $30,000.
Answer: B
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A reason why an increase in the price level decreases the quantity of real GDP demanded is that
A) the buying power of money increases. B) potential GDP decreases. C) the price of domestic goods and services increases relative to foreign goods and services. D) the real interest rate falls. E) the inflation rate decreases.
Using a graph of the classical labor market, illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage. What will eventually happen in this labor market if it is perfectly competitive?
What will be an ideal response?
If the company can correctly anticipate the adverse selection, what premiums would it charge??
a. $2500
b. $2600
c. $1000
d. $1100
Show, using utility theory, why a consumer who is initially maximizing her utility will alter her consumption pattern in response to a change in the price of a good.
What will be an ideal response?