In 1914, Henry Ford increased his workers’ wages from $3 to $5 per day and succeeded in increasing his profits. Which of the following principles was he demonstrating?
a. efficiency wage
b. relative price
c. natural rate of unemployment
d. potential output
a. efficiency wage
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A ________ in the real interest rate ________ consumption expenditure and shifts the consumption function ________
A) fall; increases; downward B) rise; decreases; upward C) fall; increases; upward D) fall, decreases; upward E) rise, increases; downward
The opportunity cost of going to college is
a. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. b. the value of the best opportunity a student gives up to attend college. c. zero for students who are fortunate enough to have all of their college expenses paid by someone else. d. zero, since a college education will allow a student to earn a larger income after graduation.
As the dollar is devaluated
A. inflationary pressures are reduced and our standard of living is reduced. B. inflationary pressures are increased and our standard of living is increased. C. inflationary pressures are reduced and our standard of living is increased. D. inflationary pressures are increased and our standard of living is reduced.
When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is
A) inelastic. B) elastic. C) unit elastic. D) perfectly inelastic.