Suppose the typical basket for the calculation of the CPI includes one computer. Since computers have gotten better over time as a result of technological change, what problem does this create for calculating the CPI?
The improvement in the computer over time creates a problem of unmeasured quality change.
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If the price elasticity of demand for chicken is 2, then a 20 percent decrease in the price of chicken will lead to a:
A. 10 percent increase in the quantity demanded of chicken. B. 40 percent increase in the quantity demanded of chicken. C. 10 percent decrease in the quantity demanded of chicken. D. 40 percent decrease in the quantity demanded of chicken.
A diversified portfolio is comprised of
A) a broad range of various types of assets. B) government bonds issued by federal, state and local governments. C) corporate stocks of several companies in the same industry. D) a diverse set of corporate bonds.
The law of demand implies that the demand curve is Question 6 options:
A. downward sloping. B. upward sloping. C. downward sloping at high prices and upward sloping at low prices. D. upward sloping at high prices and downward sloping at low prices.
Joe's income is $500, the price of food (F) is $2 per unit, and the price of shelter (S) is $100. Which of the following represents his marginal rate of transformation of food for shelter?
A) -5 B) -50 C) -.02 D) None of the above.