In the figure above, which budget line has the lowest relative price of compact discs?
A) AD
B) BD
C) CD
D) The relative price is equal for all three budget lines.
C
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Refer to the table below. Recall that the bidders only know their own private value of the item and they do not know the other participants' private values. Further, assume each participant will submit bids using their optimal strategy. If the participants are bidding in a sealed-bid first-price auction, Bidder ________ wins the auction and pays ________.
The table above lists the independent private values of five participants in an auction. Each of the bidders only knows their own value and does not know the private values of the other participants.
A) #3; $10 million
B) #5; 9.5 million
C) #5; a value less than $10 million and greater than $9.5 million
D) #3; a value less than $10 million and greater than $9.5 million
If the price level in an economy decreases, other things constant, people consume _____
a. more because nominal income falls b. less because nominal income rises c. more because the real value of their wealth increases d. less because real income decreases e. less because the real value of their wealth decreases
Which of the following is an assumption made about a competitive labor market?
a. A firm must offer a higher wage rate to attract more labor. b. A firm must offer a lower wage rate to attract more labor. c. A firm cannot influence the market wage rate. d. The labor supply curve facing each firm is inelastic. e. Workers compete for jobs and firms pay a variety of wage rates.
The electric power company in a city increased its prices by 15% this year. Since the demand for electricity is a(n) ________ demand in the short run, the equilibrium price will ________.
A. inelastic; greatly increase B. elastic; decrease C. inelastic; decrease