?19742015Minimum wage per hour$ 2.00$ 7.25Weekly income from minimum wage$80.00$290.00Cost of a standard basket of goods$47.00$236Number of baskets per week1.701.23
Use Table 2.5 above to answer the question. Comparing the minimum wages between 1974 and 2015 addresses the economic concept of:
A. the marginal principle.
B. the principle of voluntary exchange.
C. the principle of diminishing returns.
D. the real-nominal principle.
Answer: D
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Suppose firms in a perfectly competitive market are incurring an economic loss. Over time
A) other firms enter the market, so the price rises and the economic loss decreases. B) some firms leave the market, so the price rises and the economic loss decreases. C) other firms enter the market, so the price falls and the economic loss decreases. D) some firms leave the market, so the price falls and the economic loss decreases.
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. At a quantity of 4,000 pounds
A) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently low. B) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. C) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. D) producers should raise the price to $9 in order to sell the quantity demanded of 4,000.
If an inefficient public monopoly cannot provide a service at a price that sufficient numbers of people are willing to pay it:
A. can remain in operation by covering its losses with revenue from taxes. B. must shut down and leave the industry in the long run. C. should expand operations until demand is satisfied. D. will seek out more efficiencies.
The base year in the consumer price index (CPI) is:
a. given a value of zero. b. a year chosen as a reference for prices in all other years. c. always the first year in the current decade. d. established by law.