Ruben Earned a Salary of $60,000 in 2001 and $80,000

question 71

Multiple Choice

Ruben earned a salary of $60,000 in 2001 and $80,000 in 2006.The consumer price index was 177 in 2001 and 221.25 in 2006.Ruben's 2006 salary in 2001 dollars is

• A)$20,000;thus,Ruben's purchasing power increased between 2001 and 2006.
• B)$20,000;thus,Ruben's purchasing power decreased between 2001 and 2006.
• C)$64,000;thus,Ruben's purchasing power increased between 2001 and 2006.
• D)$64,000;thus,Ruben's purchasing power decreased between 2001 and 2006.

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Definitions:

Factor of Production

Resources used in the creation of goods and services, which include land, labor, capital, and entrepreneurship.

Total Income

The full amount of income received by an individual or a country, including wages, salaries, benefits, and income from investments before any deductions.

Marginal Product

Marginal product is the addition to total output produced by using one more unit of a specific input, holding all other inputs constant.

Marginal Revenue

The change in total revenue generated by an additional unit of output.