Suppose hypothetically that you buy a lot of food such as tofu, veggie burgers, and organic fruit that are not included in the market basket used to compute the CPI. In addition, suppose that all of these goods have become cheaper over the last year, while the overall CPI has increased by 6 percent. Then which of the following is true?
a. The CPI will understate the negative impact of inflation
on your purchasing power and standard of living.
b. The CPI will still accurately state the negative impact of inflation on your purchasing power and standard of living.
c. The CPI will overstate the negative impact of inflation on your purchasing power and standard of living.
d. None of the answers above are correct.
c
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What must be the case if a perfectly competitive firm's economic loss is less by shutting down rather than by producing and selling some output?
What will be an ideal response?
Figure 5-3
Assume the market consists of three consumers with the demand curves in Figure 5-3. At a price of 1, the total market demand is
A. 40. B. 80. C. 140. D. 150.
Refer to Figure 2-12. What is the opportunity cost of producing one gallon of milk in Tahiti?
A) 5/6 of a gallon of honey B) 1.5 gallons of honey C) 1.2 gallons of honey D) 1/2 of a gallon of honey
Entrepreneurs
a. will prosper if they undertake projects that increase the value of the resources. b. are people who extend loans to other business decision makers. c. are managers who generally work for a salary because they are unwilling to take risks. d. will propser if they charge prices higher than their rivals.