The consumer price index implicitly assumes that the demand curve for each good and service in the representative market basket is
A) vertical. B) negatively sloped. C) positively sloped. D) horizontal.
A
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The costs of determining who to bargain with are called
A) search costs. B) collectivization costs. C) negotiation costs. D) monitoring and enforcement costs.
Consider the US market for chocolate, a market in which the government has imposed a price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling? a. a government study that shows that consuming chocolate increases the incidence of cancer. b. a large increase in the size of the cocoa bean crop; cocoa beans are used to produce
chocolate. c. South American cocoa bean producers refuse to ship to chocolate producers in the US. d. a sharp drop in consumer income; chocolate is a normal good.
In a perfectly competitive market, if price is greater than average total cost at the level of output where marginal cost equals marginal revenue:
A. the firm must be in long-run equilibrium. B. the firm is earning an economic profit greater than zero. C. the firm is earning an economic profit less than zero. D. We cannot determine whether the firm is earning positive or negative profits.
If the number of employed people goes down at the same time that the unemployment rate goes down, then we may conclude that some people must have
A. left the labor force. B. entered the labor force. C. been forced off unemployment benefits. D. either retired or died.