A worker can always build a chair in four hours. If a chair sells for $40 in a perfectly competitive market, then the equilibrium wage per hour in a perfectly competitive labor market is

If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the actual inflation rate turned out to be 3.2%, then the real interest rate equals

A) 1.7%. B) 3.2%. C) 3.3%. D) 4.7%.

The result that, under certain circumstances, no government action is needed to control an externality because it can be eliminated by bargaining between the affected parties is called

A) a Nash equilibrium. B) Coase Theorem. C) Bargaining Theorem. D) English Bargaining.