Recall the Application about the time involved in including cell phones in the calculation of the Consumer Price Index (CPI) to answer the following question(s).According to the Application, if the telecommunications component of the Consumer Price Index (CPI) was biased upward by 1.9 percent, then if increase in telecommunications prices were measured at 1.1 percent, then in reality, telecommunication prices:
A. decreased by 0.8 percent.
B. increased by 3 percent.
C. increased by 0.8 percent.
D. decreased by 3 percent.
Answer: A
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A payoff matrix shows:
A. the payoff to being a perfectly competitive firm. B. the demand curve facing a firm when there are only two firms. C. the payoffs for each possible combination of strategies. D. the payoff to being a monopolist.
Which of the following is not an advantage cost-plus pricing?
A) It leads to profit maximization. B) It could lead to price stability if the industry is made up of identical firms all using the same method of pricing. C) It is an easy method to implement if a firm produces multiple products and has overhead costs that are difficult to allocate to a particular good. D) It is easy to justify price increases when total costs of production increase.
Which of the following is not a potential source of monopoly?
a. patents b. economies of scale c. competitive tactics d. civil rights
Monetarists view government intervention in the economy as
A) necessary to maintain full employment. B) unnecessary and potentially damaging. C) effective because it stimulates capital formation. D) leads to consistently higher employment and output.