In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010 . A bottle of cologne cost $30 in 2009 and $40 in 2010 . Using 2009 as the base year, which of the following statements is correct?
a. For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years.
b. The consumer price index is 310 in 2010.
c. The rate of inflation is 29.17% in 2010.
d. None of the above is correct.
c
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If you sell a $100,000 interest-rate futures contract for 110, and the price of the Treasury securities on the expiration date is 106, your ________ is ________
A) profit; $4000 B) loss; $4000 C) profit; $6000 D) loss; $6000
The absolute value of the slope of an indifference curve equals the ratio of the marginal utilities of the two goods involved
What will be an ideal response?
Jacob and Mason go to a diner that sells burritos for $5 and tacos for $3 . They agree to split the lunch bill evenly. Mason chooses a taco. The marginal cost to Jacob of ordering a burrito instead of a taco is
a. $1. b. $2. c. $2.50. d. $3.
Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about
A) one-half to one percentage point. B) one to two percentage points. C) one quarter percentage point. D) one and one-half percentage points.