Economists collect data on prices in every country and develop an index that describes the overall difference in prices between countries called the:
A. purchasing power parity index.
B. price parity purchasing index.
C. consumer price index.
D. consumer purchasing power index.
Answer: A
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The object of diversification is
A) to reduce risk and fluctuations in income. B) to reduce risk, but not to reduce fluctuations in income. C) to reduce fluctuations in income, but not to reduce risk. D) neither to reduce risk, nor to reduce fluctuations in income.
Physical capital is distinguished from human capital because
A) physical capital refers to trained people. B) physical capital refers to equipment and machinery, whereas human capital refers to trained people. C) human capital refers only to day laborers. D) physical capital refers to trained people, whereas human capital refers to equipment and machinery.
One might commit the fallacy of composition by concluding that
a. statements that are true during prosperity are necessarily true during depression b. what is good for the individual is necessarily good for the group c. an event that precedes another is necessarily the cause of the latter d. intentions need not coincide with actions e. the composition of a complex product is not revealed by its exterior appearance
Rent seeking in the form of lobbying for an increase in import tariffs by domestic producers
A) increases consumer surplus. B) increases total welfare. C) increases the deadweight loss. D) None of the above.