Sharisse brags to her mother that her starting salary as a management trainee is 36,000, much higher than her mother's starting salary of 21,000 as a management trainee several years ago.
If the CPI the year Sharisse begins work is 181.2 and the CPI the year her mother started work was 109.1, Sharisse is
A) wrong. Adjusting for price changes, her salary is less than her mother's salary.
B) correct. Adjusting for quantity changes, her salary is more than her mother's salary.
C) correct. Adjusting for price changes, her salary is more than her mother's salary.
D) wrong. Adjusting for quantity changes, her salary is less than her mother's salary.
E) maybe wrong and maybe right. Adjusting for quantity changes, her salary is less than her mother's salary but with the information given we are unable to further adjust for price changes.
Question 2
If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________, and the equilibrium quantity ________.
A) does not change; decreases
B) rises; increases
C) falls; increases
D) rises; decreases
E) falls; decreases
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