Lizzie's budget line is shown in the figure above. If the price of a cookie rises, Lizzie's real income in terms of cookies ________ and her real income in terms of magazines ________
A) decreases; increases
B) increases; decreases
C) decreases; does not change
D) increases; does not change
C
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Suppose that a firm has to pay a 10% tax on its total revenue. This has the effect of
a. flattening marginal cost. b. increasing marginal revenue. c. decreasing marginal cost. d. decreasing marginal revenue.
The optimal number of workers to be hired by a firm operating in a competitive labor market is where:
a. P = MRP. b. MP = MRP. c. MRP = w. d. P = w. e. TWC = w.
Much of the U.S. government’s budget is tied to the Consumer Price Index (CPI), including Social Security benefits. Assume that the Social Security Administration (SSA) pays $980 million in benefits this year. If the CPI overstates inflation by 1 percent, how much money does the SSA stand to lose due to overpayments the following year?
a. $98,000 b. $980,000 c. $9.8 million d. $98 million
When an economy is operating at its full employment rate of output:
A. the rate of unemployment will be zero. B. output will exceed the economy's maximum sustainable rate. C. the actual rate of unemployment will equal the natural rate. D. the economy's potential rate of output will exceed actual GDP.