Studies have shown that
A) firms often cut nominal wages during recessions and allow inflation to gradually increase real wages.
B) firms are reluctant to cut nominal wages during recessions but instead increase workers' nominal wages and allow inflation to gradually increase real wages.
C) firms are reluctant to cut nominal wages during recessions but instead freeze workers' nominal wages and allow inflation to gradually reduce real wages.
D) firms often freeze workers' nominal wages during a recession and keep the wages frozen well after the recession has ended.
Answer: C
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A) $25. B) -$25. C) $50. D) -$50.
To assess whether or not a good is normal or inferior, economists are interested in the cross price elasticity of demand
a. True b. False Indicate whether the statement is true or false
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A risk-neutral monopoly must set output before it knows the market price. There is a 50 percent chance the firm's demand curve will be P = 40 ? Q and a 50 percent chance it will be P = 60 ? Q. The marginal cost of the firm is MC = 3Q. What is the expression for the expected marginal revenue function?
A. E(MR) = 30 ? 2Q B. E(MR) = 50 ? 2Q C. E(MR) = 60 ? 2Q D. E(MR) = 40 ? 2Q