The Consumer Price Index (CPI) is an index of the cost of a market basket of goods purchased by a typical household
a. True
b. False
A
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Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that
A) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good. B) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good. C) an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a luxury. D) an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
The demand for money will fall for each of the following reasons, except
A) more ATMs. B) higher real GDP. C) lower interest rates on transactions accounts at banks. D) more risky banks.
Because financial markets clear, we know that leakages in the economy will equal injections and, therefore, there will be enough spending in the economy to purchase whatever amount of output level produced
a. True b. False
Both a perfectly competitive firm and a monopolist find that:
A. price and marginal revenue are the same. B. they can sell as many units of output as they want at the market price. C. price is less than marginal revenue. D. it is best to expand production until the benefit and the cost of the last unit produced are equal.