Suppose lawn mowers are part of the market basket used to compute the CPI. Suppose also that the quality of lawn mowers deteriorates while the price of lawn mowers stays the same. If the Bureau of Labor Statistics is able to precisely adjust the CPI for the improvement in quality, then, other things equal,
a. the CPI will rise.
b. the CPI will fall.
c. the CPI will stay the same.
d. lawn mowers will no longer be included in the market basket.
a
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A consumer has maximized her total utility (as measured in money) when, at the quantity of each good chosen
A. marginal utility is negative. B. marginal utility divided by price is equal to 1. C. marginal utility is greater than price. D. marginal utility is equal to total utility.
According to purchasing power parity, a rise in inflation in the United States. relative to the rest of the world will lead to
A) a balance of payments surplus. B) a balance of payments deficit. C) an exchange rate appreciation. D) an exchange rate depreciation.
Your friend does not understand the benefits of globalization. Outline for your friend the positive economic aspects of globalization
What will be an ideal response?
When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to ________ the equilibrium price in this market and, therefore, ________ efficiency
A) raise; increase B) raise; decrease C) lower; decrease D) lower; increase