The CPI is a measure of the:
A. average level of prices relative to prices in the base year.
B. price of a specific good or service.
C. rate of inflation.
D. real wage.
Answer: A
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Table 10-2 ? Firm A Firm B Firm C Firm D Total revenue (TR) $ 100 150 100 100 Total variable cost (TVC) 180 160 60 140 Short-run nonvariable cost 60 20 60 100 ? Refer to Table 10-2. Which firm is better off staying in business in the short run?
A. Firm A B. Firm B C. Firm C D. Firm D
Efficiency is attained when
a. total surplus is maximized. b. producer surplus is maximized. c. all resources are being used. d. consumer surplus is maximized and producer surplus is minimized.
Use the following diagrams to answer the next question.
Assume the economy is on aggregate demand AD4. The Fed should attempt to raise investment by enough to shift aggregate demand from AD4 to ________.
A. AD3 and then to AD2 B. AD3 and then to AD1 C. AD2 and then to AD3 D. AD1 and then to AD2
An adverse supply shock generally decreases the price level and real GDP.
a. true b. false