The CPI equals 1.00 in year one and 1.15 in year two. If the nominal wage is $15 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?
A. $16.15
B. $17.25
C. $22.50
D. $15.00
Answer: B
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"When OPEC increases the supply of oil to the market, the price of gasoline falls." This is an example of
A) a normative statement. B) the failure of opportunity cost to determine prices. C) a positive statement. D) a macroeconomic statement.
The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?
A) The sellers will pay more of the tax than the buyers. B) The buyers will pay more of the tax than the sellers. C) The sellers and buyers will split the tax evenly. D) The sellers will pay the entire tax.
A subsidy is sometimes used by the government to correct the problems associated with
A) negative externalities. B) positive externalities. C) public goods. D) monopolies.
____ occur when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower its per-unit costs become
a. Economies of scope b. Scale economies c. Product differentiation d. Perfect competition