An advantage of the personal consumption expenditures price index (PCE) over the Consumer Price Index (CPI) as a measure of inflation is that the PCE
A) is a fixed market-basket price index that does not allow the mix of products to change each year.
B) includes the prices of consumer services, but not consumer goods.
C) includes the prices of more consumer goods and services.
D) includes the prices of consumer goods, but not consumer services.
C
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If a firm finds itself operating in Stage I, it implies that
A) variable inputs are extremely expensive. B) it overinvested in fixed capacity. C) it underinvested in fixed capacity. D) fixed inputs are extremely expensive.
If an economy produces only steel and wheat, a new fertilizer will
A) cause the production of wheat to increase at every point on a production possibilities curve but not affect the production of steel, that is the curve moves outward on the wheat axis only. B) cause the production of both wheat and steel to increase at every point along the production possibilities curve, that is the curve moves outward on both the wheat axis and the steel axis. C) not affect the production of either wheat or steel. D) cause the production of steel to increase at every point along the production possibilities curve but not affect the production of wheat, that is the curve moves outward on the steel axis only.
The largest component of GDP is:
a. personal consumption expenditures. b. government spending. c. durable goods. d. net exports. e. gross private domestic investment.
A monopoly earns total revenue of $5,000 when it sells 500 units of output and total revenue of $5,400 when it sells 600 units of output. Thus, the marginal revenue of the 600th unit is $9.
Answer the following statement true (T) or false (F)