Which of the following is an example of money illusion?
A) An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 5 percent.
B) An individual is willing to work more hours when the nominal wage rises by 10 percent and the overall price level rises by 20 percent.
C) An individual will neither increase nor decrease the number of hours she is willing to work when the nominal wage rises by 10 percent and the overall price level rises by 10 percent.
D) none of the above
B
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It costs a furniture company $8,750 to produce 25 tables. The company's total cost will be $9,125 if it produces a 26th table. If the company produces 26 tables, then
a. its average cost is greater than its marginal cost. b. its average cost and its marginal cost are equal. c. its average cost is less than its marginal cost. d. This cannot be determined from the information given.
When actual output is less than potential output there is a(n):
A. trade deficit. B. budget deficit. C. recessionary gap. D. budget surplus.
If the quantity of burgers supplied increases from 2 to 4 when the price of burgers increases from $2.00 to $5.00, the response by producers would be shown by:
A. a leftward shift in the supply curve. B. a movement upward and to the right along the supply curve. C. a rightward shift in the supply curve. D. a movement downward and to the left along the supply curve.
If a 10 percent change in the price of a good caused a 10 percent change in the quantity demanded of the good, we would say that over this range of prices the good has a(n)
A) elastic demand. B) inelastic demand. C) perfectly elastic demand. D) unit elasticity of demand.