Because official price indexes do not account for some improvements in product quality, official estimates of real GDP overestimate the true increase in real output.
Answer the following statement true (T) or false (F)
False
Because official price indexes do not account for some improvements in product quality, the price indexes overestimate inflation and thus underestimate the true increase in real output.
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A rise in the price of a good causes producers to supply more of the good. This statement illustrates
A) the law of supply. B) the law of demand. C) a change in supply. D) the nature of an inferior good.
A country's government would like to raise the price of one its most important agricultural crops, coffee beans. Which of the following government programs will result in higher prices for coffee beans?
A) An import quota on coffee beans B) An acreage limitation program which provides coffee bean farmers financial incentives to leave some of their acreage idle C) An import tariff on coffee beans D) all of the above
If an excise tax is imposed on steak,
a. the government's tax revenue will decrease b. the government's tax revenue will increase c. the amount of steak produced and sold will increase d. the market price of steak will decrease e. the market price will rise but the market quantity will be unaffected
A new law applied to a competitive market that requires that laid off workers be paid a large severance payment will
A) not generate a deadweight loss. B) increase total welfare. C) increase consumer surplus in the market. D) decrease consumer surplus in the market.