Suppose that in 2013, all prices in the economy increased by 50% and that all wages and salaries also increased by 50%. In 2013, you were
A) better off than you were in 2012 as your salary was higher than it was in 2012 and you could buy more goods and services.
B) worse off than you were in 2012 as you could no longer afford to buy as many goods and services.
C) no better off or worse off than you were in 2012 as the purchasing power of your salary remained the same.
D) The purchasing power of your salary cannot be determined with the given information, so you cannot determine if you were better off or worse off in 2013 than in 2012.
C
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A local pizzeria raised its price from $9 to $11 for each pizza and the sales of its pizza decreased from 150 to 100 per day. What is the price elasticity of demand in this case?
A) 1/2 B) -2 C) -1/2 D) 2
If the economy is in a recession, the Fed could:
A. buy bonds through open market operations to increase spending in the economy. B. sell bonds through open market operations to increase spending in the economy. C. increase the discount rate so banks will increase their lending in the economy. D. increase the reserve requirement to increase confidence in the financial system.
When marginal cost is greater than average cost, average cost is
a. rising. b. falling. c. constant. d. The direction of change in average cost cannot be determined from this information.
Compared to a perfect competitor, the colluding oligopolist
A. charges a higher price. B. has a higher ATC and is therefore less efficient. C. restricts output. D. All of the choices are correct.