Which of the following best describes how the real balance effect works?
A) The price level falls, purchasing power rises, a person's monetary wealth rises, and the person buys fewer goods and services.
B) The price level rises, purchasing power rises, a person's monetary wealth decreases, and the person buys more goods and services.
C) The price level rises, purchasing power falls, a person's monetary wealth falls, and the person buys fewer goods and services.
D) The price level falls, purchasing power rises, a person's monetary wealth falls, and the person buys fewer goods and services.
E) none of the above
C
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Pollution problems generally represent
A) cases of good versus evil. B) cases of villain versus victim. C) morally neutral disagreements over competing uses of a scarce resource. D) Both a and b are correct.
Suppose the downward sloping labor demand curve shifts rightward in a labor market with a single employer (monopsony). What happens to the marginal expenditure curve?
A) Shifts left B) Shifts right C) Remains the same D) We do not have enough information to answer this question.
When there are diseconomies of scale in production: a. long-run average total cost declines as output expands. b. long-run average total cost increases as output expands. c. marginal cost decreases as output expands
d. none of the above
Suppose computer prices at an office supply store fall from $1,000 to $900 and as a result the quantity demanded of typewriters decreases from 40 to 20 per month. The cross-price elasticity of demand is closest to
A. 6.3. B. 5.0. C. 0.16. D. 0.2.