Which of the following does not lead to the CPI underestimating increases in prices?
a. The substitution bias
b. The quality bias
c. The new outlet bias
d. The housing bias
d
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Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) rises; does not change D) falls; decreases E) falls; increases
In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. Now suppose that demand increases
The increase in demand results in the quantity supplied A) increasing. B) staying the same. C) decreasing. D) increasing, staying the same, or decreasing depending on how much demand increases.
Maurice Allais, Reinhard Selten, and Vernon Smith all were awarded the Nobel Prize in Economics in part because
A) they proved that external economies would lead to market failure. B) of their work on the substitution and income effects of price changes. C) of their work with experimental economics. D) they discovered the first example of a Giffen good.
In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in
A) tastes and preferences. B) military capabilities. C) the size of their economies. D) relative abundance of factors of production. E) labor productivities.