In which of the following situations would a worker have the greatest real income?
a. She receives a pay cut and her nominal wage falls by 5 percent, while the CPI falls by 20 percent.
b. She receives a pay cut and her nominal wage falls by 5 percent, while the CPI increases by 10 percent.
c. Her nominal wage remains the same, as does the CPI.
d. She receives a raise and her nominal wage increases by 5 percent, while the CPI increases by 10 percent.
e. She receives a raise and her salary increases by 5 percent, while the CPI falls by 5 percent.
A
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A transmission lag:
What will be an ideal response?
Suppose the elasticity of supply of land is 0 and elasticity of demand is 2. If the government imposes a 10 percent tax on land, then
A) buyers and sellers each pay 5 percent of the tax. B) buyers pay all of the tax. C) sellers pay all of the tax. D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax. E) buyers pay 1/2 of the tax.