Suppose a price index is formed to measure changes in the price level between 1989 to 1995. If the price index focuses on the year-to-year costs of the typical market basket purchased in 1989, then the reported price changes
a. seem worse for consumers than they really are.
b. seem better for consumers than they really are.
c. accurately reflect changes in people's levels of satisfaction.
d. may overestimate or underestimate the effects of price changes, depending on whether consumers' indifference curves are relatively flat or steep.
a. seem worse for consumers than they really are.
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“Assume that all individuals have perfect information about prices now and in the future, that they have identical tastes, that all markets are competitive, and that there is no government." This statement is an example of how economists
A. apply the law of supply and demand. B. employ marginal analysis. C. are prevented from getting correct answers. D. ignore reality. E. use unrealistic assumptions to develop theory.
Answer the next question(s) based on the following supply and demand schedules in units per week for a product.PriceQuantity DemandedQuantity Supplied$601004005014034040180280302202202026016010300100The government's introduction of a guaranteed price floor of $50 will result in
A. a shortage of 200 units. B. an unstable market. C. a surplus of 200 units. D. no shortage or surplus.
"A Nash equilibrium occurs when both parties to a game end up worse off as a result of the decisions that are made." Is the previous definition of a Nash equilibrium correct or incorrect?
What will be an ideal response?
Labor is available at a wage of $10. The last worker hired by Cal’s Corn Farm added 20 ears of corn, which Cal has priced at four ears for $1. What advice would you give Cal?
What will be an ideal response?