Employing a fixed-weight index like the Consumer Price Index to adjust a person's salary in response to inflation will overcompensate this person because doing so will allow this person to
A) buy the same bundle of goods as he did before the inflation.
B) achieve a higher level of utility than he did before the inflation.
C) achieve the same level of utility as before the inflation.
D) buy more of all goods.
B
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Table 5-1B Number of coconuts 0 1 2 3 4 Robinson’s marginal utility C $2.00 $1.88 $1.60 $1.30 If a graph of Robinson’s marginal utility were constructed from Table 5-1B, it would
A. illustrate the “law” of diminishing marginal utility. B. be a negatively sloped curve. C. illustrate a typical consumer’s satisfaction derived from consumption of consecutive units of a good. D. All of the responses are correct.
Consider gardening books. What will happen to the market for these books as gardening becomes more popular and simultaneously printing costs increase?
A) The price of gardening books definitely increases. B) The quantity of gardening books definitely increases. C) The price of gardening books might increase or decrease. D) The quantity of gardening books definitely stays the same.
Assets that the IMF created to be used by countries to settle international payment obligations are called
A) capital intervention accounts. B) foreign currency reserves. C) gold reserves. D) special drawing rights.
Kathryn chooses to go to college full-time rather than to work. Kathryn: a. is not part of the labor force
b. is part of the labor force and what economists call a discouraged worker. c. is part of the labor force, but not actively seeking work. d. is considered employed.