Given the following figures, by approximately what percentage did Aiden's real income increase between 2004 and 2005? Aiden's 2004 money income = $50,000 Aiden's 2005 money income = $55,000 2004 CPI = 120.0 2005 CPI = 128.0
a. zero
b. 3.1 percent
c. 6.7 percent
d. 10 percent
B
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Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired produces four units of output per hour, then to maximize profits the firm should
A) hire another worker. B) not change the number of workers it currently hires. C) lay off some workers. D) There is not enough information to answer the question.
Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed in fixed proportions. An increase in the price of coffee will yield
a. a substitution effect and an income effect in opposite directions. b. a substitution effect and an income effect in the same direction. c. a substitution effect but no income effect. d. an income effect but no substitution effect.
Which of the following institutions form the private sector in an economy?
a. Only households b. Households and the government c. Households, businesses, and foreign firms d. Households and businesses only e. Foreign investors and foreign governments
Which of the following is both an economic and a financial investment?
A. Government building a new road. B. Boeing Corporation building a new factory. C. A private citizen buying corporate stock. D. The Federal Reserve buying bonds from commercial banks.