When differences between nominal GDP and real GDP result due to price changes and nothing else is compared, an index is created called the:
A. inflation index.
B. consumer price index.
C. GDP deflator.
D. index of leading indicators.
Answer: C
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Refer to Table 10-3. The table above shows Lee's marginal utility per dollar from consuming ice cream cones and cans of Lime Fizz Soda. The price of an ice cream cone is $2 and the price of Lime Fizz Soda is $1
Use this information to select the correct statement. A) If Lee has an unlimited budget he will maximize his utility by buying only Lime Fizz Soda. B) We cannot determine how many ice cream cones and cans of Lime Fizz Soda Lee will consume without knowing what his income is. C) To maximize his utility Lee should consume 1 ice cream cone and 5 cans of Lime Fizz Soda. D) We cannot determine how many ice cream cones and cans of Lime Fizz Soda will maximize Lee's utility because we are given only the marginal utility per dollar values. We also need to know the marginal utility for each quantity.
The slope of the production possibilities frontier is
A) positive. B) negative. C) zero. D) undefined.
The degree to which _____ declines during a recession or increases during an expansion depends on the amount by which the AD and/or AS curves shift
a. real GDP b. government tax revenue c. the money supply d. real interest rate e. the consumer price index
In the long run, a profit-maximizing firm will choose to exit a market when
a. average fixed cost is falling. b. variable costs exceed sunk costs. c. marginal cost exceeds marginal revenue at the current level of production. d. total revenue is less than total cost.