If there is a 5 percent increase in the CPI, then there will most likely be
A) a more than 5 percent rise in the cost of living because of the introduction of new goods.
B) a 5 percent rise in the cost of living.
C) a less than 5 percent rise in the cost of living because of consumers substituting away from goods whose
relative prices rise towards other goods.
D) a more than 5 percent rise in the cost of living because of consumers substituting away from goods whose
relative prices rise towards other goods.
E) a less than 5 percent rise in the cost of living because of falling quality of goods over time.
C) a less than 5 percent rise in the cost of living because of consumers substituting away from goods whose
relative prices rise towards other goods.
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When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long-run aggregate supply curve
A) slopes upward. B) slopes downward. C) is vertical. D) is horizontal.
A firm that holds a monopoly in both goods stands to gain from a tie-in sale
A) True. B) False. C) True, which is why anti-trust laws exist. D) False, there are no dual monopolies.
A shortage will occur if:
A. the quantity being supplied at a given price is less than the quantity demanded at that price. B. the quantity being supplied at a given price exceeds the quantity demanded at that price. C. there are not enough buyers in the market. D. there are only inexperienced firms in the market.
Which of the following is an example of an externality?
a. cigarette smoke that permeates an entire restaurant b. a flu shot that prevents a student from transmitting the virus to her roommate c. a beautiful flower garden outside of the local post office d. All of the above are correct.