Which of the following correctly describes how we compute inflation using the consumer price index?
a. One would compute (i) the total cost of a fixed set of goods and services in some base year, (ii) the total cost of the same fixed set of goods and services in a future year, and (iii) compute the percentage change between (i) and (ii).
b. One would track the price of a familiar consumer good over time, such as tooth paste. Inflation is simply the growth rate in the price of the consumer item.
c. One would (i) track the percentage growth rate in the price of a familiar consumer good, such as tooth paste, (ii) track the percentage growth rate in wages, and (iii) subtract (i) from (ii) to get inflation.
d. One would compute (i) the marginal cost of a fixed set of goods and services in some base year, (ii) the marginal cost of the same fixed set of goods and services in a future year, and (iii) compute the percentage change between (i) and (ii).
a
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Which of the following best describes the effect on the aggregate supply curve if political negotiations result in a substantial decrease in the price of oil?
A) There is no change to the AS curve. B) The AS curve does not shift but there is a downward movement along it. C) The AS curve shifts leftward. D) The AS curve does not shift but there is an upward movement along it. E) The AS curve shifts rightward.
The exchange of secondhand securities
a. takes place in an oligopolistic market b. does not provide funds to the firm that issued those securities c. includes the initial sale when securities are issued by a firm d. involves very few institutional investors e. lowers the liquidity of the securities
If demand curve D2 represents a monopolistic competitor and demand curve D1 represents a perfect competitor, then
A. the perfect competitor has a more elastic demand curve than the monopolistic competitor.
B. the monopolistic competitor has a more elastic demand curve than the perfect competitor.
C. the perfect competitor and the monopolistic competitor have identical elasticity in their demand curves.
D. None of these choices are true.
Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit, its accounting:
A. profits were $100,000 and its economic profits were zero. B. profits were zero and its economic losses were $500,000. C. losses were $500,000 and its economic losses were zero. D. profits were $500,000 and its economic profits were $1 million.