Mary Ellen lives in a large city and earns $100,000 a year. Her sister, Molly, lives in a small rural community and earns only $20,000 a year
Based on this information, can you conclude that Mary Ellen is better off than her sister? Explain your answer.
From this information it is impossible to determine who is better off. Mary Ellen's income is higher than Molly's, but Molly may be willing to sacrifice income so that she doesn't have to deal with the problems associated with living in a large city. Income is an imperfect measure of well-being.
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A liquidity trap is said to exist when a change in monetary policy has no effect on
A) the money supply. B) the natural level of employment. C) aggregate supply. D) interest rates.
If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then
A) to maximize profit the firm should decrease output. B) to maximize profit the firm should continue to produce the output it is producing. C) to maximize profit the firm should increase output. D) Not enough information is given to say what the firm should do to maximize profit.