The GDP deflator represents a somewhat ____ measure of prices that the CPI and the GDP deflator tends to be ____ volatile than the CPI
a. broader; more
b. broader; less
c. narrower; more
d. narrower; less
b
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The price elasticity of new automobile purchases is about 1.2. This implies that an increase of $1,000 on a $10,000 automobile will
A. reduce the number of autos sold by approximately 1.2 percent. B. increase the consumer expenditures on autos by approximately 1.2 percent. C. reduce the number of autos sold by approximately 12 percent. D. increase consumer expenditures on autos by approximately 12 percent.
The market for electricians in a small town might have a different structure than in a large city because
A) cartels are legal in large cities but not in small towns. B) the small town market can only support a few electricians. C) unions are stronger in large cities than in small towns. D) None of the above.
Why would a firm in a perfectly competitive market always choose to set its price equal to the current market price? If a firm set its price below the current market price, what effect would this have on the market?
Joe consumes 48 units of food and 12 units of clothing. If food is an inferior good:
A. Joe would strictly prefer receiving $10 in cash to receiving a $10 gift certificate at a clothing store. B. Joe would strictly prefer receiving a $10 gift certificate at a clothing store to receiving $10 in cash. C. upon receiving a $10 gift certificate at a clothing store, Joe would consume less clothing and more food. D. Joe would be indifferent between receiving a $10 gift certificate at a clothing store and receiving $10 in cash.