What is the meaning of the phrase ceteris paribus to an economist?
(A) The way that economists consider the changes in demand for a good.
(B) A projection about the change in availability of a good.
(C) An assumption that nothing but the price of an item will change.
(D) A conjecture about the changes in consumer behavior.
Ans: (C) An assumption that nothing but the price of an item will change.
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The current base period for the CPI is
a. 1967. b. 1977. c. 1982–1984. d. 1990.
Suppose one observes that when the price of peanut butter increases, the demand for jelly increases. One should conclude that:
A. peanut butter and jelly are substitutes. B. peanut butter and jelly are complements. C. peanut butter and jelly are normal goods. D. peanut butter and jelly are inferior goods.
The best example of an increase in capital is:
A) The discovery of new oil reserves. B) new computer software. C) legal immigration of computer programmers. D) conversion of military facilities to civilian uses.
Which of the following is an example of normative analysis?
What will be an ideal response?