Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00. This year your cafeteria job pays $9.90 per hour and download costs $1.10. You are clearly
A. worse off because of inflation.
B. worse off because the download is now relatively more expensive.
C. better off because your wage rate went up.
D. better off because the download now costs less work.
Answer: D
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A situation is efficient if it is:
A. not possible to find a transaction that will make at least one person better off without harming others. B. possible to find a transaction that will make everyone better off. C. possible to find a transaction that will make at least one person better off, even if others are made worse off. D. possible to find a transaction that will make at least one person better off without harming others.
An indifference curve
A) connects a set of consumption bundles among which the consumer is indifferent. B) is only useful in analyzing apathetic consumers. C) connects a set of consumers who each have the same preferences. D) is only useful in microeconomics.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
If fractional reserve banking exists, then:
A. the money multiplier is equal to 1. B. banks need only keep a portion of each deposit on hand. C. lending would be curtailed to nearly zero. D. money cannot be created in the economy through banks.