If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then
A) changes in the CPI accurately reflect the true rate of inflation.
B) changes in the CPI understate the true rate of inflation.
C) changes in the CPI overstate the true rate of inflation.
D) changes in the CPI are unrelated to the true rate of inflation.
Answer: C
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A) the combinations of two inputs that yield the same total product. B) the combinations of two inputs that cost the same total quantity of money. C) the combinations of two goods that yield the same total satisfaction. D) the combination of two goods that cost the same amount of money.
On the modern Phillips curve, the initial impact of productivity improvements that lower the costs of production is shown by ________
A) an upward movement along the Phillips curve to a higher inflation rate B) an upward shift of the Phillips curve leading to higher inflation rates for any unemployment rate C) a downward shift of the Phillips curve leading to lower inflation rates for any unemployment rate D) a downward movement along the Phillips curve to higher unemployment rates E) none of the above
Sam's manufacturing plant recently decided to pay its workers 14% more than the current market wage for equivalent skills. Such a management decision can be due to
a. noncompetitive labor markets b. labor surpluses c. the need for better skills d. efficiency wages e. community desires
If society chose to maximize total utility rather than minimum utility,
a. society would achieve perfect income equality. b. society would achieve the maximin objective. c. its justice would be more utilitarian than Rawlsian. d. its justice would be more Rawlsian than utilitarian.