Suppose a market basket of goods and services costs $400 in the base year and $500 this year. The consumer price index (CPI) for this year is:
a. 25.
b. 100.
c. 125.
d. 500.
c
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Suppose George withdraws $60,000 from his bank. If the reserve ratio is 25 percent, then this transaction will lead to a decrease of ________ in checking account balances
A) $15,000 B) $45,000 C) $90,000 D) $180,000
Why do economies of scale and monopoly power exist with network goods?
A. Many small firms must develop to serve all of the consumers willing to pay for access to the network good, so their costs are driven down. B. Network goods require a group of sellers working together and this cooperation reduces the firms' cost per unit. C. Just as the value of a network good decreases to each user as the total number of users increases, so does the long run average cost decrease as output increases. D. As the number of people connected to a network increases, the greater the benefits each person gets and the smaller the cost per unit to supply.
If the cross-price elasticity of salt and pepper is positive the goods must be complements.
Answer the following statement true (T) or false (F)
Medicare
A) subsidizes the care of older people, which gives them NO incentive to consume more medical services. B) subsidizes the care of older people, which gives them an incentive to consume more medical services. C) subsidizes the care of young people, which gives them an incentive to consume less medical services. D) subsidizes the care of middle aged people, which gives them an incentive to consume more medical services.