Joe buys chicken and beef. If the price of beef rises and the price of chicken does not change, Joe will buy ________ for the CPI
A) more beef and create a new goods bias
B) more chicken and create a commodity substitution bias
C) the same quantity of beef and chicken and create a commodity substitution bias
D) less chicken and beef and create a quality change bias
E) more chicken and eliminate the commodity substitution bias
B
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Suppose you operate in a monopolistically competitive market. If you sell your good at a price of $10 and your average cost of production is $8:
A. your market is in long-run equilibrium. B. we can expect firms to enter your market and sell a similar good in the long run. C. there will be no incentive for competing firms to enter your market in the long run. D. you cannot be in short-run equilibrium.
Gordon is a person who sells narcotics "on the street." This type of illegal activity:
A. Would be considered double counting in calculating GDP B. Is estimated and included in GDP figures C. Is excluded from GDP figures D. Causes GDP to be overstated
Suppose the CPI in 1983 is 100 and the CPI this year is 172. These values for the CPI mean that
A) inflation between the two years was 172 percent. B) typically, a good whose price was $100 in 1983 had a price of $172 this year. C) typically, a good whose price was $172 in 1983 had a price of $100 this year. D) typically, a good whose price was $100 in 1983 had a price of $139 this year. E) typically, a good whose price was $100 in 1983 had a price of $58 this year.
Suppose the market clearing price for apples falls from $3.00 to $2.00 per pound, and the overall market clearing output increases from 1 million to 2 million pounds. How can we explain the fall in price and increase in market output?
A) Supply decreased and demand remained unchanged. B) Supply remained unchanged and demand decreased. C) Demand increased and supply remained unchanged. D) Demand remained unchanged and supply increased.