If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $12,000 to purchase those identical goods in 2015, then the inflation rate from 2005 to 2006 is
A. (100-83.3)/100*100%=16.7%.
B. (100-100)/100*100%=0%.
C. (120-100)/100*100%=20%.
D. unknown given this data.
Answer: D
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What does the negative slope of the utilities possibilities frontier imply?
A) Diminishing marginal utility. B) The only way to increase one person's utility is to decrease another person's utility. C) Diminishing marginal rates of substitution. D) The only way to increase output of one good is to decrease output of another.
A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills falls from $375 to $330, given the scenario described, which of the following can be said? A. Butch will join the market, but receive no consumer surplus. B. Butch and Collin will join the market, and together will receive $30 in consumer surplus. C. Abe will experience a decrease in consumer surplus of $45. D. Abe will experience an increase in consumer surplus of $45.
What does the demand curve for a product reflect?
a) the quantity consumers are able to purchase b) the value of the product to consumers c) the cost of the product to consumers d) the price the product will sell for in the market
If the demand for an asset increases, its:
A. Price will increase and the rate of return for new investors of this asset will increase B. Price will decrease and the rate of return for new investors of this asset will increase C. Price will decrease and the rate of return for new investors of this asset will decrease D. Price will increase and the rate of return for new investors of this asset will decrease