When the consumer price index falls, the typical family
a. has to spend more dollars to maintain the same standard of living.
b. can spend fewer dollars to maintain the same standard of living.
c. finds that its standard of living is not affected.
d. can save less because they do not need to offset the effects of rising prices.
b
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A price ceiling is a legally determined maximum price that sellers may charge
Indicate whether the statement is true or false
While deficits in the United States through the 1970s, 1980s and early 1990s were high relative to our historical peacetime experience, they
a. were been below average for large industrial countries. b. were above average when compared to other large industrial countries. c. were about average for large industrial countries. d. were the lowest when compared to other large industrial countries.
Which of the following is a main political objection against using the market to reduce pollution?
A. Pollution charges and cap-and-trade schemes raise prices and lower consumer welfare. B. Cap-and-trade redistributes income from less-efficient polluters to more-efficient polluters. C. Firms already pay a high corporate tax. D. Consumers do not have the same built in tax loopholes as firms.
Which of the following phenomena shows that risk aversion is the characteristic of many people?
A. The popularity of high-stakes poker tournaments B. Homeowners insurance C. Investing in one stock rather than a portfolio D. Horse-race betting