The price of dishwashers has remained relatively constant while the quality of dishwashers has improved. The CPI
A) is adjusted monthly to reflect the improvement in quality.
B) is increased monthly to reflect the increased quality of dishwashers.
C) has an upward bias if it is not adjusted to take account of the higher quality.
D) has an upward bias because it does not reflect the increased production of dishwashers.
E) should not take account of any quality changes because it is a price index not a quality index.
C
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If a seller enjoys a producer surplus of $30 when he sells a good for $79, his reservation value for the good is ________
A) $30 B) $49 C) $79 D) $109
In the U.S., people tend to discard items rather than repair them because
a. Americans are lazy b. of the high opportunity cost of time c. it is costly to use land for waste disposal d. high wages in the waste disposal industry discourages repairs e. low wages in the repair industry encourages disposal
The rule of reason would have not found a well-behaved, but gigantic, firm to be in violation of the antitrust laws
a. True b. False Indicate whether the statement is true or false
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.