If the base year CPI market basket costs $250 and next year the CPI market basket costs $275, what is next year's CPI?
What will be an ideal response?
The CPI equals 100 × ($275/$250 ) = 110.
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Explain the difference between partial equilibrium analysis and general equilibrium analysis
What will be an ideal response?
When a negative externality exists in the case of a particular good, and if that is not reflected in the price, _____
a. too little of that good is produced and consumed b. too much of that good is produced and consumed c. all resources are taken away from the production of that good d. the government completely prohibits the consumption of that good e. all resources are allocated to the production of that good
The national defense argument for trade restriction holds that
A) the president should have the authority to erect trade barriers in case of war or national emergency. B) free trade is a danger to the national defense because open borders increase the likelihood that spies will get into the country. C) a country should produce those goods necessary for national defense purposes even if it doesn't have a comparative advantage in them. D) if your enemy erects trade restrictions, so should you.
The amount of a good that must be given up to produce another good is the concept of:
A. scarcity. B. specialization. C. opportunity cost. D. efficiency.