An Associate Professor of Physics Gets a $200 a Month

question 161

Multiple Choice

An associate professor of physics gets a $200 a month raise.She figures that with her new monthly salary she can buy more goods and services than she could buy last year.

• A)Her real and nominal salary have risen.
• B)Her real and nominal salary have fallen.
• C)Her real salary has risen and her nominal salary has fallen.
• D)Her real salary has fallen and her nominal salary has risen.

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Definitions:

Monopolistically Competitive

An economic setup in which a variety of businesses market goods that are comparable yet distinct, enabling them to have some market control and differentiate their offerings.

Guaranteed A Profit

An assurance that an investment or business endeavor will yield a positive return or profit.

Long Run

In economics, a period in which all inputs, including capital, can be fully adjusted, allowing firms to change their scale of operation.

Economic Profit

An economic profit occurs when the revenue generated from a business activity exceeds both the explicit and implicit costs associated with that activity.