Suppose we expect consumer prices to increase by about 30 percent between 2010 and 2020, and the minimum wage was $7.25 per hour in 2010. What should be the minimum wage in 2020 if it is set to maintain the same purchasing power as in 2010?
A) $7.25
B) $7.55
C) $9.42
D) none of the above.
B
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For a normal good, the income elasticity of demand is:
A) positive or negative depending on the share of income accounted for by the good. B) always equal to 1. C) positive if income increases and negative when income declines. D) always positive.
The price elasticity of supply is the __________________ change in the quantity supplied of a good or service divided by the percentage change in the price.
a. quantity b. percentage c. relative d. absolute
The opportunity cost of any good or service is the
A. actual dollar cost of doing or making it. B. highest price that a seller can get for the item. C. value of the next best alternative. D. cost associated with a value judgment. E. cost of producing the good or service.
John is an athlete. He has $120 to spend and wants to buy either a heart rate monitor or new running shoes. Both the heart rate monitor and running shoes cost $120, so he can only buy one. This illustrates the principle that
a. trade can make everyone better off. b. people face trade-offs. c. rational people think at the margin. d. people respond to incentives.