Babe Ruth's 1931 salary was $80,000 . Government statistics show a consumer price index of 15.2 for 1931 and 215 for 2008 . Ruth's 1931 salary was equivalent to a 2008 salary of about
a. $536,000.
b. $828,000.
c. $1,131,000.
d. $1,216,000.
C
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Suppose the Economics Department has a graduation party for its students but as a final test they must show they have learned something about trade. The men are given food when they walk in and the women are given drink. Suppose they have identical preferences where food and drink provide utility U = F?D? . The exchange would be such that
a. both would be guaranteed to be better off than when they entered. b. both would be guaranteed to be at least as well off as when they entered. c. the men would end up with more. d. the women would end up with more.
Which of the following statements is TRUE?
A) Government spending as a percent of total national income has continuously decreased since the 1950s. B) Transfer payments are money payments made by the government for which no goods or services are currently received. C) Education is the largest category of federal government expenditures. D) Transfers in kind include Welfare, Social Security, and unemployment insurance benefits.
When Congressional decision makers chose not to raise taxes to fight the war on terrorism, they
A. eliminated the opportunity cost of war. B. exploited the fact that borrowed money has no opportunity cost. C. borrowed the money, moving the opportunity cost into higher interest rates and/or crowding out. D. printed all of the money required to fight the war on terrorism.
In the above figure, suppose the government subsidizes the production of milk so that milk production increases to 8 million gallons per day
What is the size of the deadweight loss? (Hint: It is equal to the triangular area of negative consumer and producer surplus that results when output exceeds the efficient level.) A) $12.5 million B) $6.25 million C) $4.50 million D) $2.25 million