A price index measures:
A. the average price of a given class of goods or services relative to the price of the same goods and services in a base year.
B. the price of specific good or service.
C. only the prices that change.
D. the change in the price of a specific good or service.
Answer: A
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Which of the following statements about the nominal and the real wage rates is correct?
A) The nominal wage rate equals the real wage rate divided by the CPI and then multiplied by 100. B) The nominal wage rate is measured in the dollars of a base year. C) The real wage rate is measured in current year dollars. D) The real wage rate indicates how many goods and services can be purchased with an hour's labor. E) The real wage rate equals the nominal wage rate multiplied by the CPI then divided by 100.
A price ceiling of $8 placed on the market in the graph shown:
A. is binding, and causes a surplus. B. is non-binding, and does not affect the market. C. is non-binding, and does not prevent the market from reaching equilibrium. D. is binding, and causes a shortage.