As a result of "money illusion," people:
A. tend to be more upset by a decrease in their real wage than by a decrease in their nominal wage.
B. tend to be more upset by an increase in their nominal wage than by a decrease in their real wage.
C. tend to be more upset by a decrease in their nominal wage than by a decrease in their real wage.
D. tend to be more pleased with an increase in their real wage than by an incre
Ans: C. tend to be more upset by a decrease in their nominal wage than by a decrease in their real wage.
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During the Obama administration, the development of low-cost batteries for electric cars received large amounts of federal funding in terms of subsidies. Meanwhile, American households gave a higher priority towards minimizing their environmental impact. Consider the market for zero-emissions electric vehicles where there is an upward-sloping supply curve and a downward-sloping demand curve. What will happen to the equilibrium price?
A. Price increases. B. Price decreases. C. Change is ambiguous. D. Price remains constant.
Which of the following is NOT an application of supply and demand analysis?
A) Understanding changing world economic conditions and their effects on prices B) Evaluating the effects of government price controls on the agricultural industry C) Determining how taxes affect aggregate consumption spending patterns D) all of the above E) none of the above