With respect to the consumer price index, which of the following does not serve as an example of how the substitution bias arises? Between 2010 and 2011, the price of a pound of peanuts
a. rises from $0.80 to $1.00 while the price of a loaf of bread rises from $2.00 to $2.50.
b. rises from $1.00 to $1.30 while the price of a loaf of bread rises from $2.00 to $2.30.
c. remains constant, while the price of a loaf of bread rises from $2.00 to $2.30.
d. falls from $1.00 to $0.80 while the price of a loaf of bread falls from $2.00 to $1.80.
a
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Suppose the consumer's indifference curves are concave (i.e., bowed away from the origin) instead of convex. In this situation,
a. along an indifference curve, the marginal value of X is falling as more X and less Y is consumed. b. all baskets on the budget line give the consumer the same level of satisfaction. c. the marginal value of X must equal PX/PY at the consumer's optimum. d. the consumer's optimum is always a corner solution.
The output of Mexican citizens who work in Texas would be included in the
A) net national product of the United States. B) gross national product of the United States. C) gross national product of Mexico. D) gross domestic product of Mexico.
If Americans decide to buy more South African diamonds, what is the effect in the foreign market?
a. It will increase demand for U.S. dollars. b. It will decrease demand for U.S. dollars. c. It will increase supply of U.S. dollars. d. It will decrease supply of U.S. dollars.
At which point might society be able to produce if new resources were discovered but cannot produce with current resources? (See Figure 1.1.)
A. A. B. B. C. C. D. D.