Suppose that in 2013, all prices in the economy increased by 50% and that all wages and salaries also increased by 50%. In 2013, you were
A) better off than you were in 2012 as your salary was higher than it was in 2012 and you could buy more goods and services.
B) worse off than you were in 2012 as you could no longer afford to buy as many goods and services.
C) no better off or worse off than you were in 2012 as the purchasing power of your salary remained the same.
D) The purchasing power of your salary cannot be determined with the given information, so you cannot determine if you were better off or worse off in 2013 than in 2012.
C
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Because producers do not bear the external cost of pollution,
A) private production exceeds the economically efficient level. B) the economically efficient level of production is achieved. C) private production is below the economically efficient level. D) the market price for the product being produced by the pollution-generating company is too high.
The basis of the benefits of specialization is
a. comparative advantage b. absolute advantage c. size of country d. identical production costs between two countries e. self-sufficiency