If a consumer is at an optimum, consuming X and Y, and the price of Y increases, then to get to a new equilibrium the consumer must
A) purchase less X.
B) purchase less of both X and Y.
C) purchase more X.
D) purchase more of both X and Y.
Answer: C
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Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that
A) provide secure rights to private property. B) establish an independent court system that enforces contracts. C) facilitate the development of an efficient financial system. D) avoid playing any role in developing communication systems.
The good news for unions and their members is that union workers earn about 20% more than nonunion workers, even after adjusting for factors such as years of work experience and education level. What is the bad news?
a. In the 1930s, union members earned 37% more than nonunion members, after adjusting for inflation. b. Most unionized companies were driven out of business, leaving only about 5% of U.S. workers in unions. c. The percentage of U.S. workers who belong to labor unions has declined steadily for 50 years. d. As union membership rises, the wage gap will shrink.
Refer to the diagram. From society's perspective, if MB 2 and MC 1 are relevant:
A. Q 4 represents too little pollution abatement.
B. Q 1 represents too little pollution abatement.
C. Q 3 represents an optimal amount of pollution abatement.
D. Q 2 represents too little pollution abatement.
If the price level rises by 4 percent in a year and nominal wages increase by 2 percent, then real wages will:
A. Decrease by 6 percent B. Decrease by 4 percent C. Decrease by 2 percent D. Increase by 2 percent