Since 2004, the Fed has focused on a core price index that excludes food and energy prices to measure inflation because
A) food and energy are necessities, so consumers have no choice but to purchase these.
B) food and energy prices tend to remain stable in the short run, so are not relevant to the calculation of inflation.
C) including food and energy prices tends to overstate the true inflation rate by 0.5% to 1%.
D) food and energy prices tend to fluctuate up and down for reasons that may not be related to the general causes of inflation.
D
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Tobin's q is equal to ________
A) the market value of a firm times the replacement cost of installed capital B) the market value of a firm plus the replacement cost of installed capital C) the market value of a firm divided by the replacement cost of installed capital D) the market value of a firm minus the replacement cost of installed capital
The default effect
A. refers to the observation that people tend to value something more highly when they own it than when they don't. B. refers to the observation that people tend to value something more highly when they don't own it than when they do. C. refers to the fact that when confronted with many alternatives, people sometimes avoid making a choice and end up with the option that is assigned as a default. D. refers to the observation that people do not have a strong attachment to the status quo.
Deadweight loss is the net loss of:
a. consumer surplus. b. producer surplus. c. disequilibrium surplus. d. both a and b.
Hutch Technology makes computer monitors, which sell for $100 each. What is the opportunity cost of ten monitors?
a. $1,000. b. the other goods that could be produced with the resources that produce the ten monitors c. the profits that Hutch earns when it sells the ten monitors d. the profits that Hutch loses if it does not produce the monitors e. All of the above are correct.