The commodity substitution bias is that
A) consumers substitute high-quality goods for low-quality goods.
B) government spending is a good substitute for investment expenditures.
C) national saving and foreign borrowing are interchangeable.
D) consumers decrease the quantity they buy of goods whose relative prices rise and increase the quantity of goods whose relative price falls.
D
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If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals
A) 200. B) 225. C) 325. D) 450.
An individual who pays for personal auto repair has incurred a
A) social cost. B) private cost. C) negative externality. D) positive externality.
Economics is a social science rather than a "hard" science like physics because
a. economists abstract from reality when creating their theories. b. economics is easier to study than physics. c. economists must explain their theories to policy makers who lack formal mathematical training. d. economists study human behavior, which is affected by an unpredictable and vast range of influences.
The demand curve facing an individual producer of wheat is most likely represented by
a. Panel D. b. Panel C. c. Panel A. d. Panel B.