A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.07 in the second year. What dollar wage must be paid in the second year?
A. $11.02
B. $10.70
C. $10.90
D. $10.30
Answer: A
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The above figure shows a payoff matrix for two firms, A and B, that must choose between selling basic computers or advanced computers. Firm B's dominant strategy
A) is to make basic computers. B) is to make advanced computers. C) is to adopt firm A's strategy. D) does not exist in this game.
Suppose two neighbors share a park. One neighbor, Al, leaves trash in the park. This bothers the other neighbor, Bert. According to Coase's theorem, one necessary condition to alleviate the externality is that
A) Al is fined by the government. B) Al has the right to leave trash and Bert cannot do anything about it. C) Bert has the right to a clean park and Al cannot leave trash. D) Either Al or Bert owns the park.
Behavioral economists use findings from psychology to explain complex consumer behavior that cannot always be explained by traditional economic models
a. True b. False Indicate whether the statement is true or false
Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________.
a. income gap b. market equilibrium c. law of demand d. price model