What is Consumer Price Index (CPI) ?
A. CPI is a tool used to measure the average price level of all final goods and services produced.
B. CPI is the measurement of the price of a fixed basket of goods and services relative to the price of that same basket in some base year.
C. CPI is the measurement of the amount of money that it takes to produce a fixed level of utility.
D. None of the above.
B. CPI is the measurement of the price of a fixed basket of goods and services relative to the price of that same basket in some base year.
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Promoters for the Rolling Stones were clearly "short selling" when
A) they distributed their latest CD to radio stations free of charge. B) they sold their latest CD to retailers at wholesale prices. C) they sold the world-tour concert tickets weeks in advance. D) they promoted the band without Bill Wyman, the original bass player.
In the market for yen, an increase in U.S. real interest rates tends to
A. decrease demand. B. increase equilibrium price. C. increase excess demand. D. cause no change in equilibrium price.
Suppose the demand for rental apartments decreased substantially. We would expect to observe
A) no change in rent and a sharp reduction in quantity supplied in the short run, and an even larger decrease in quantity supplied in the long run. B) a large decrease in quantity supplied in the short run, followed by a counter-reaction and an increase in quantity supplied in the long run. C) a small decrease in quantity supplied and significantly lower rents in the short run, and quantity supplied to decrease much more in the long run. D) a large decrease in quantity supplied in the short run and the long run, but much larger reductions in rent in the long run.
Suppose that football tickets at your university are given away for free, and that there are still empty seats for all games. Ignoring all other costs of going to the games, you should continue attending until your:
A. Total utility stops increasing B. Marginal utility begins to diminish C. Marginal utility stops increasing D. Total utility reaches zero