In 1975, Richard Petty won the NASCAR race in Richmond, earning $6265. In 2006, Dale Earnhardt, Jr., won the race, earning $239,166. The CPI index was 52.5 in 1975 and 198.7 in 2006 (base year = 1982-1984 )
Calculate the real earnings (based on base year 1982-1984 ) of both Petty and Earnhardt.
Petty: $6265/(52.5/100 ) = $11,933. Earnhardt: $239,166/(198.7/100 ) = $120,365. So Earnhardt's real earnings were over ten times those of Petty (thanks to NASCAR's increased popularity).
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What will be an ideal response?
Imagine an economy in which: (1) pieces of paper called yollars are the only thing that buyers give to sellers when they buy goods and services, so it would be common to use, say, 50 yollars to buy a pair of shoes; (2) prices are posted in terms of yardsticks, so you might walk into a grocery store and see that, today, an apple is worth 2 yardsticks; and (3) yardsticks disintegrate overnight, so
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A. limited resources require economies to make choices among production alternatives. B. income must be redistributed through taxation in order to address income disparity. C. the United States will always have a battle to fight hunger. D. resources are often wasted and shortages are often the result.
Purchasing a season pass to the local symphony
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