Jen is offered a job answering the phone in the State U economics department during lunchtime, from noon to 1 p.m., Tuesdays and Thursdays. Her reservation wage for this job is $15 per hour. If the department chair offers Jen $150 per week, how much economic surplus will she enjoy as a result of accepting the job?
A. $135 per week
B. $15 per week
C. $150 per week
D. $120 per week
Answer: D
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Because resources are scarce, economists would say that
A) people's wants are unlimited. B) anything worth doing is worth doing well. C) every choice has an opportunity cost. D) there are no benefits from cooperation. E) the best things in life are always free.
A combination of recession and inflation is called
A) a recession. B) an expansion. C) a business cycle. D) stagflation. E) depression.
If the price of its product falls below the minimum point on the AVC curve, the best a perfectly competitive firm can do is to
A) keep producing and incur an economic loss equal to its total variable cost. B) keep producing and incur an economic loss equal to its total fixed cost. C) shut down and incur an economic loss equal to its total variable cost. D) shut down and incur an economic loss equal to its total fixed cost.
The ratio of the change in consumption to the change in disposable income is called the
A) marginal utility of consumption. B) average utility of consumption. C) marginal propensity to consume. D) average propensity to consume.