Which of the following best describes the "education premium"?
A. The added pay for getting a higher level of education
B. The added cost of getting a higher level of education
C. The added benefits for society as a whole from a person getting a higher level of education
D. The increase in average wages, in inflation-adjusted dollars, over time
Answer: A
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Refer to the above figure. The top two arrows of the figure refer to the product markets. The bottom arrows refer to the factor markets. Which arrow represents total income?
A) Arrow A B) Arrow B C) Arrow C D) Arrow D
Which of the following indicates that there is a shortage in the market?
A) Demand is rising. B) Demand is falling. C) Price is rising. D) Price is falling.
Government intervention is sometimes used to reduce the external costs of production.
Answer the following statement true (T) or false (F)
If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then
A) changes in the CPI accurately reflect the true rate of inflation. B) changes in the CPI understate the true rate of inflation. C) changes in the CPI overstate the true rate of inflation. D) changes in the CPI are unrelated to the true rate of inflation.