When the market basket is tracked over time the goods within the basket:
A. remain the same, so only changing prices are captured.
B. reflect the typical consumer each year, so it captures how consumers are affected each year.
C. reflect the typical consumer each year, but prices are held constant, so it captures if we are consuming more or less as an economy.
D. remain the same, but some prices are held constant on items that are important to consumers.
A. remain the same, so only changing prices are captured.
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If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________
A) 0.33 B) 0 C) negative D) 3.00
Next year's expected price of oil is $90 per barrel. If the interest rate climbs from 5 percent to 20 percent per year and nothing else changes, then according to the Hotelling Principle the price of oil this year
A) will rise. B) will fall. C) will not change. D) could rise, fall, or stay the same.
By the permanent-income hypothesis, for every dollar that actual income increases, consumption expenditure rises in the short run by ________ dollars
A) kj B) k + j C) k/j D) k - j E) j + (1/k)
Use the above table. What percentage of income is received by the poorest 20% of the population?
A) 20 percent B) 13.3 percent C) 11.1 percent D) 7.0 percent