A rise in domestic productivity tends to __________ domestic prices and causes the dollar to __________ relative to foreign currencies
A) raise; appreciate
B) raise; depreciate
C) lower; appreciate
D) lower; depreciate
C
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The consumer price index [CPI] measures price changes at an earlier stage of production than the producer price index [PPI], hence, increases in the CPI are usually followed by increases in the PPI
a. True b. False Indicate whether the statement is true or false
Recognition lag is the time it takes for policymakers to recognize the existence of an economic expansion or a recession
a. True b. False Indicate whether the statement is true or false
If General Electric finds that when it doubles both its plant size and the amount of associated inputs, its output level does not double, then
a. the law of diminishing returns is in effect. b. long-run average costs must be decreasing. c. the firm is experiencing diseconomies of scale. d. the firm should increase production. e. the firm is experiencing constant returns to scale.
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her
home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Ziva's economic profit from farming equals a. $-130. b. $-80. c. $130. d. $170.