A consumer is currently spending all of her available income on two goods: music CDs and DVDs. At her current consumption bundle, she is spending twice as much on CDs as she is on DVDs. If the consumer has $120 of income and is consuming 10 CDs and 2 DVDs, what is the price of a CD?
a. $4
b. $8
c. $12
d. $20
b
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An economy's production function is Y = A , and the economy's total output in equilibrium is $90 billion. Total capital income in this economy is ________
A) $27 billion B) $30 billion C) $21 billion D) $70 billion E) none of the above
Within the Keynesian model, if the output of an economy is less than the full-employment level, then
a. a reduction in government expenditures will direct the economy back to full-employment equilibrium. b. a reduction in wage rates and resource prices will quickly restore full-employment equilibrium. c. a reduction in the real interest rate will soon restore full-employment equilibrium. d. output will tend to remain below full-employment capacity unless aggregate expenditures increase.
In the early twentieth century, streetcars in many southern cities were segregated by race. This racial segregation was the result of
a. laws that required such segregation. b. long-standing southern traditions about which the law was silent. c. streetcar firms trying to maximize profits. d. streetcar firms trying to minimize costs.
Inflation is
A. generally steady from year to year. B. generally beneficial to countries. C. one of the key measures in the GDP. D. one of the key measures of the health of an economy.