The real-nominal principle states that:
A. people respond more to explicit, or real, costs than to implicit costs.
B. people respond more to implicit costs than to explicit costs.
C. what matters to people is the face value of money or income.
D. what matters to people is the purchasing power of money or income.
Answer: D
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Refer to Monopoly Problem. The equation for this monopolist’s marginal revenue is
Consider a monopoly with constant marginal costs of $20. Consumers in the market for this monopoly’s product have demand of Q = 100 - 2P. a. MR = 100 - 2P b. MR = 100 - 4P c. MR = 50 - 0.5Q d. MR = 50 - Q
Gross domestic product (GDP) does not include:
a. used goods sold in the current time period. b. foreign produced goods. c. intermediate as well as final goods. d. None of these would be included.
Most prophecies of the imminent exhaustion of many natural resources have not come true because
a. such resources are generally available in infinite quantities. b. rising prices for resources have stimulated supply and encouraged innovation. c. the demand for most natural resources has fallen as income levels have increased. d. government price floors have prevented resource exhaustion.
In 1972, one could buy model rocket engines for $1.50 each. If those same engines cost $2.50 each today, then which pair of CPIs would make the engine prices in today's dollars the same for both years?
a. 60 in 1972 and 95 today b. 60 in 1972 and 120 today c. 90 in 1972 and 150 today d. 96 in 1972 and 154 today