At age 40, Joe is considering quitting his job and going back for a college degree. He needs two more years full-time. Tuition is $10,000 per year. He earns $30,000 per year. A college degree would raise his annual income by $10,000 per year. He will retire at age 70. Which of the following makes it more likely that Joe will decide to go back to college full-time?
A) The rate of interest increases.
B) The rate of interest decreases.
C) The government enacts mandatory retirement at age 60.
D) Tuition increases.
B
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When the price of summer tank tops falls and you buy more of them because they are relatively less expensive, this is called
A) the income effect. B) the deadweight loss effect. C) the elasticity effect. D) the substitution effect.
Would you rather receive $100 in eight years paying an interest rate of 10% or be given 48 dollars today?
A) I would rather receive 48 dollar today. B) I would rather receive $100 in eight years. C) I am indifferent between the two options. D) I cannot determine which I would prefer.
Price elasticity of demand measured over a range of prices and quantities along the demand curve is _____
a. point elasticity b. arc elasticity c. income elasticity d. cross elasticity e. price elasticity
The flat region of the aggregate supply curve reflects the Keynesian belief that:
a. both inflation and unemployment does not exist. b. high growth rate of money supply poses problems in the economy. c. unemployment is usually experienced amidst high real GDP. d. government intervention in the economy aggravates the problems of inflation and unemployment. e. inflation is not a problem when unemployment is high.