If the benefits of X = $50 and the price of X = $50, then
A. you will be indifferent between buying X and keeping your money.
B. $0 is the reservation price.
C. $100 is the reservation price.
D. you should buy X.
Answer: A
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Perfectly competitive industry X has constant costs and its product is an inferior good. The industry is currently in long-run equilibrium. The economy now goes into a recession and average incomes decline. The new long-run equilibrium will result in a(n)
A. decrease in output, but not in the equilibrium price of the product. B. increase in output and in the equilibrium price of the product. C. increase in output, but not in the equilibrium price of the product. D. decrease in output and in the equilibrium price of the product.
One advantage of ad valorem taxes over unit taxes is that _____
a. the tax is more difficult to evade b. the tax is easier to collect c. the tax increases with inflation d. the tax automatically adjusts for inflation
"It is difficult to compare over time health care expenditures, costs, and output." Do you agree or disagree? Why?
What will be an ideal response?
If you as a lender want an increase in purchasing power of 4 percent from making a loan and you set the nominal interest rate at 9 percent, then your
a. real rate of interest is 13 percent. b. expected rate of inflation is 5 percent. c. expected rate of inflation is 13 percent. d. real rate of interest is 36 percent.