Suppose that the extra cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda.
B. drink a third glass of soda if his total benefit from drinking soda is positive.
C. drink a third glass of soda if the extra benefit of doing so is positive.
D. not drink a third glass of soda.
Answer: C
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The economy of Budopia is going through a recession. How will a countercyclical policy affect the labor market in Budopia if wages are flexible? Explain with a diagram
What will be an ideal response?
Consumption spending is part of __________ and the largest component of consumption spending is for ____________
a. GDP; services b. national income; durable goods c. national income; nondurable goods d. GDP; housing e. GDP; food
The price effect describes the:
A. increase in the quantity of labor supplied in response to a lower wage. B. decrease in the quantity of labor supplied in response to a higher wage. C. increase in the quantity of labor supplied in response to a higher wage. D. increase in the quantity of labor demanded in respond to a higher wage.
If Bart's money wages doubled from 2013 to 2018 and the consumer price index rose by 50%, we would know that Bart's real wages
A. fell by 50%. B. stayed about the same. C. rose by less than 50%. D. doubled.