Alejandro expects the price level to rise from 105 this year to 108 next year. If the price level rises to 110 next year instead of 108, which of the following will occur?
A) Alejandro's real wage rises.
B) Alejandro's real wage remains unchanged.
C) Alejandro's real wage may rise or fall, depending on the unemployment rate.
D) Alejandro's real wage falls.
D
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Equilibrium Interest Rate
Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?
What will be an ideal response?
In professional golf, a tournament winner might win, say, $1 million, whereas second place wins only $600,000. Why might golf have a 40% reduction in prize money from first and second place?
A) To ensure that there is enough money to pay those who finish near last. B) To motivate golfers to take risks they might not otherwise take. C) To motivate golfers to not take risks they might otherwise take. D) The Professional Golfers Association is a cartel.
A demand relationship that is a vertical line up from the quantity axis is
A) perfectly elastic. B) unit-elastic. C) perfectly inelastic. D) somewhat elastic.