Compute how much each of the following items is worth in terms of today's dollars using 177 as the price index for today
a. In 1926, the CPI was 17.7 and the price of a movie ticket was $0.25.
b. In 1932, the CPI was 13.1 and a cook earned $15.00 a week.
c. In 1943, the CPI was 17.4 and a gallon of gas cost $0.19.
a. The movie ticket is worth $.25 x 177/17.7 = $2.50 in today's dollars.
b. The cook's weekly wage is worth $15.00 x 177/13.1 = $202.67 in today's dollars.
c. The gallon of gas is worth $.19 x 177/17.4 = $1.93 in today's dollars.
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Refer to the scenario above. Which of the following will happen in equilibrium if the car dealer has a reputation of trustworthiness?
A) You will trust him and he will cooperate. B) You will trust him and he will defect. C) You will not trust him. D) You will earn positive consumer surplus.
XYZ Co operates in a competitive market. Its marginal product of labor is 1/L, and it takes the wage and price as given. Derive the firm's short-run demand for labor as a function of w and p. How much labor will the firm hire if w = 2 and p = 10?
What will be an ideal response?
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a. relational contracts with distributors b. vertical requirements contracts c. spot market transactions d. variable price agreements
Adverse selection arises in insurance markets because
a. insurance buyers have more information than insurance sellers. b. insurance sellers have more information than insurance buyers. c. individuals can select which insurance company to patronize. d. insurance companies can exercise too much control over whom they insure.