Suppose that the consumer price index has risen from 100 to 200. From this information we can conclude that
a) each person's real income was cut in half
b) consumer incomes are doubled
c) the prices in an average consumer's basket have doubled
d) all consumer good prices are doubled
e) all prices in the economy are doubled
Ans: c) the prices in an average consumer's basket have doubled
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Suppose a competitive firm's total revenue is $1,000,000 where MR = MC, its explicit variable costs are $900,000, its fixed costs are $90,000 of which $60,000 are sunk in the short run
If its implicit opportunity costs are $50,000, the firm should A) produce because its economic profit is positive. B) produce because its economic profit is zero. C) produce even though its economic profit is negative. D) shut down.
The success of the SMarT program has proven that changing the way we present options can:
A. affect people's behavior. B. help people overcome mental biases. C. avoid regret. D. All of these statements are true.
A shift of the U.S. demand curve for Mexican pesos to the left and a decrease in the pesos price per dollar would likely result from:
a. an increase in the U.S. inflation rate relative to the rate in Mexico. b. a change in U.S. consumers' tastes away from Mexican products and toward products made in South Korea, India, and Taiwan. c. U.S. buyers perceiving that domestically-produced products are of a lower quality than products made in Mexico. d. all of these.
Which of the following events would increase the four-firm concentration ratio in a milk industry with six firms?
A. The two largest milk producers merge. B. The largest milk producer buys an ice cream-making plant. C. The largest milk producer lures customers away from the second largest producer. D. The four largest milk producers collusively fix prices.