In year 1, the Consumer Price Index was 120 and the average nominal income was $30,000. In year 2, the Consumer Price Index was 125 and the average nominal level of income was $32,000. What happened to real income from year 1 to year 2?
A. It fell by $400.
B. It rose by $600.
C. It rose by $400.
D. It rose by $2,000.
Answer: B
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The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA) will
A) increase federal government spending by about $2 trillion over 10 years. B) cost the government significantly more than the additional taxes and fees enacted under the law will bring in. C) actually reduce government spending over a 20 year period. D) eliminate the budget deficit within 10 years.
Suppose that the market for coffee is in equilibrium at a price of $9.50 per pound and a monthly quantity of 20 million pounds. News of a drought in Brazil arrives so that people know that the supply of coffee months from now will be sharply reduced
What, if anything, will happen in the coffee market now? Explain.
Consider a setting in which there is a negative externality, but no positive externality. It follows that
A) the market outcome is inefficient. B) the market outcome is efficient. C) MSC > MPC D) MPC > MSC E) a and c
A firm should always shut down if it is earning negative profits.
a. true b. false