Which of the following is not one of the four principles of individual decision making?
a. People face trade-offs.
b. Trade can make everyone better off.
c. People respond to incentives.
d. Rational people think at the margin.
b
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(Consider This) Some economists believe that modest inflation, say 2-3 percent, might help reduce unemployment during recessions. Which of the following best explains their argument?
A. Inflation will cause workers' real income to decline, encouraging them to work harder to find more and better employment. B. Higher prices will increase firm profitability, making them want to hire more workers. C. Higher prices will correspond with higher wages, which will stimulate demand and employment. D. Anticipating this inflation, consumers will increase spending to beat the price increases, increasing demand, output, and employment.
Use the following table to answer the question below.Price per UnitQuantity Demanded per YearQuantity Supplied per Year$52,0000101,800300151,600600201,400900251,2001,200301,0001,500A surplus of 500 units will occur when the price is
A. $30 per unit. B. $15 per unit. C. $20 per unit. D. $10 per unit.