In the short-run, a rise in the money wage rate leads to
A) an increase in the price level and an increase in real GDP.
B) an increase in the price level and a decrease in real GDP.
C) an increase in the price level, but no change in real GDP.
D) no change in the price level, but an increase in real GDP.
B
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If, when you consume another piece of candy, your marginal utility is zero, then
A) you want more candy. B) you have not yet reached the point of diminishing marginal utility. C) you should consume less candy. D) you have maximized your total utility from consuming candy.
A Californian student consumes Internet services (I) and books (B). Her preferences are represented by a Cobb-Douglas utility function:
U(I,B) = I1/4B1/4 The prices of each good is $2 and the student has an income of $200. Over the course of the past year, the price of internet services has risen to $4, but the price of books has remained the same. The government has decided provide this student with additional money to compensate for the higher price of internet services. In order to determine the transfer the government has three consultants who have made the following suggestions: Consultant A: The student's income should be increased by a percentage found using a consumer price index (CPI). Consultant B: The additional income should allow the student to get her initial level of utility. a. Find the consumer's optimal bundle before the increase in price occurs. b. Find the consumer's optimal bundle after the increase in price occurs with income still at $200. c. Find the amount of the transfer implied by consultant A. d. Is the student necessarily better or worse off than before from such a transfer implied by consultant A? Explain why. e. Is the transfer implied by consultant B more or less than the amount implied by A? Explain. What is the precise dollar amount implied by consultant B?
In 2007, which U.S. firm showed the first indication of significant problems in the financial sector?
a. AIG b. Bear Stearns c. J.P. Morgan Chase d. Lehman Brothers
A pure private good is
A. nonrival in consumption and subject to exclusion. B. rival in consumption and subject to exclusion. C. rival in consumption and not subject to exclusion. D. all of these answer options are correct.