The Consumer Price Index was 247 in year 1 and 272 in year 2. The rate of inflation in year 2 was:
a. 12 percent
b. 6 percent
c. 10 percent
d. 8 percent
c. 10 percent
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Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by three units per hour, then to maximize profits the firm should
A) not hire an additional worker. B) not change the number of workers it currently hires. C) hire another worker. D) There is not enough information to answer the question.
Theatres charge lower prices for a matinee and usually don't accept coupons for the night showing of movies because
A) consumers that attend the matinee have a higher price elasticity of demand. B) consumers that attend the night show have a lower price elasticity of demand. C) it increases profits compared to charging a single price. D) All of the above.
Which of the following is inversely related to consumption spending?
a. Wealth b. Interest rates c. Disposable income d. Optimism about future income e. None of the above.
Oligopolistic agreements on price tend to be unstable because
a. although the monopoly price is the best price for all firms, oligopolists are unaware of this and thus charge prices that are lower than the price that could be charged by a monopolists, therefore, decreasing social welfare. b. although the monopoly price maximizes the joint profits of the firms, a secret price cut by any individual firm will increase the profits of that firm; hence, collusive agreements tend to break down. c. the demand for the products of oligopolistic industries is inherently unstable relative to the demand for the products of non-oligopolistic industries because demand for products in oligopolistic industries are dependent on changes in consumer tastes and preferences. d. firms in oligopolistic industries have more concern for consumers than do firms in competitive industries.