The compensation variation and equivalent variation will be closer to each other when
A) the income elasticity is greater.
B) the budget share is greater.
C) the price change is smaller.
D) the income elasticity is smaller.
D
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If you purchase one pound of apples the price is $1.50 per pound. If you buy a five pound bag of apples, the cost is $5.00. This is most likely an example of
A) quantity discounts. B) lower marginal cost. C) lower marginal benefit. D) price gouging.
If money raised in the issue of new stocks and bonds by corporations is used effectively,
A. the income from them is not subject to double taxation. B. a firm need not meet SEC requirements. C. the stock is being “watered.” D. they generate the means of repayment.
If the wages of a CPA decrease, (i) her opportunity cost of leisure increases. (ii) her opportunity cost of leisure decreases. (iii) her hours of labor supply may increase. (iv) her hours of labor supply may decrease
a. (i) and (iii) only b. (ii) and (iv) only c. (i), (iii), and (iv) only d. (ii), (iii), and (iv) only
The economy of Omega operates according to Okun's law. In Omega, the actual and the natural rates of unemployment both equal 5 percent, and potential GDP equals $10 trillion. What is real GDP in Omega?
A. $9.5 trillion B. $9.0 trillion C. $10.5 trillion D. $10.0 trillion