You using a Laspeyres (fixed-weight )price index to compare price changes over time, and the index is based on consumption bundles from 2005 when energy costs were lower and housing costs were higher. Your results are likely to:
A) Overstate changes in the cost of living because the weight assigned to energy is too small.
B) Overstate changes in the cost of living because the weight assigned to energy is too large.
C) Understate changes in the cost of living because the weight assigned to housing is too small.
D) Understate changes in the cost of living because the weigh assigned to housing is too large.
B
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Martha's Cleaning Services is a perfectly competitive firm that currently cleans 30 offices a week and charges $20 per office, which is the going market price. Martha's marginal cost is $15
What should Martha do to increase her economic profit? Clean more offices? Raise her price? Explain your answer.
Are there real-world markets that resemble double oral auctions? Suppose you had to organize a double oral auction for a good that has perfectly elastic demand. Do you expect prices to approach the competitive equilibrium?
What will be an ideal response?
The Industrial Revolution was centered in Great Britain, and the British
(a) tried to achieve a technological monopoly. (b) were willing to freely share industrial technology with their colonies but no other nations. (c) believed in free trade and the sale and export of technology to any nation that wanted to pay for it. (d) were willing to share their technology with other nations but not their colonies because they wished the colonies to specialize in the production of agriculture and raw materials for export to England.
Which nation's taxation is the highest percentage of the nations' GDP?
a. Australia b. United States c. Germany d. Netherlands e. Sweden