Related to the Economics in Practice on p. 572: According to the study cited in the Economics in Practice, wages tend to
A. change in lock step with changes in the price level.
B. remain rigid in both and upward and downward direction.
C. remain unchanged for about a year, which tells us that average wages change must less than average prices.
D. behave in a way that contradicts the theory of sticky wages.
Answer: C
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It is assumed that the marginal benefit of air cleanliness falls with the degree of cleanliness since
A) the marginal cost of air cleanliness increases. B) air cleanliness is a public good and not a private good. C) the marginal utility of air cleanliness falls with the degree of cleanliness. D) the generation of pollution should be considered an externality.
The factor that leads to underpricing and overuse of an economic resource is
A. human greed and selfishness. B. capital markets. C. the lack of an enforceable property right. D. the lack of understanding of pollution and its effects.
An increase in the U.S. government budget deficit shifts the
a. demand for loanable funds right and decreases investment spending. b. supply of loanable funds right and increases investment spending. c. supply of loanable funds left and decreases investment spending. d. None of the above is correct.
The central element of the oligopoly model is that each firm produces a differentiated product.
Answer the following statement true (T) or false (F)