In 1996, an advisory commission, appointed by the Senate Finance Committee, estimated that, due to certain distortions, the CPI overstates inflation by
a. .5 percentage points per year.
b. 2.0 percentage points per year.
c. 1.1 percentage points per year.
d. .25 percentage points per year.
C
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Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan if
A) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per hour. B) U.S. labor productivity equaled 30 units per hour and Japan's 20 units per hour. C) U.S. labor productivity equaled 20 units per hour and Japan's 30 units per hour. D) U.S. labor productivity equaled 15 units per hour and Japan's 25 units per hour. E) U.S. labor productivity equaled 15 units per hour and Japan's 40 units per hour.
If there is an outward shift in U.S. demand for French goods, the result will be
A) a decrease in the dollar price of a euro. B) an inward shift in French demand for U.S. goods. C) a decrease in euros traded. D) an increase in the dollar price of a euro.
The elasticity of labor demand does not depend on the:
A. elasticity of demand for the firm's product. B. elasticity of labor supply. C. possibility of and cost of substitution in production. D. relative importance of the factor in the production process.
Refer to the information in Figure 16.5 below to answer the question(s) that follow.
?Figure 16.5Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. Following the implementation of this tax, Alpha will reduce its emissions to ________ tons.
A. 25 B. 50 C. 75 D. 100