In a small, agricultural nation, consumers buy only steak and potatoes. In 2009, the base year, the typical consumer spent $potatoes on strawberries and $100 on steak. The price of potatoes is $1 and the price of steak is $2 in 2009
In 2009, the price of potatoes is $2 and the price of steak is $1. The CPI for 2010 is A) 80.
B) 125.
C) 100.
D) 110.
E) 25 percent.
C
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The estimated demand for a good is
= 25 - 5P + 0.32M + 12PRwhere Q is the quantity demanded of the good, P is the price of the good, M is income, and PR is the price of related good R. If income decreases by $1,000, all else constant, quantity demanded will ________ by ________ units.
A. decrease; 500 units B. decrease; 1200 units C. increase; 500 units D. decrease; 320 units E. increase; 3.2 units
Something that changes incentives so as to make otherwise empty threats or promises credible is called a:
A. strategic device. B. dominant strategy. C. Nash equilibrium. D. commitment device.
In economics, a firm earns a normal profit when its total revenue equals its total economic costs.
Answer the following statement true (T) or false (F)
For each of the following scenarios, determine which time lag is most likely to result when designing and implementing fiscal policy.
a. The separation of power demonstrated between the legislative and executive branches of government combined with strong partisanship attitude among our elected politicians. b. The fact that it takes economists working for the National Bureau of Economic Research months to declare the dates of peaks and troughs. c. The time it takes to design and build new infrastructure after these projects have been passed by the legislature.