The standard of living in an economy is best measured by:
A. output per person.
B. total output.
C. average labor productivity.
D. the inflation rate.
Answer: A
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If the manager of a nonprofit enterprise sets prices below market clearing levels, she
A) increases the net revenue of the enterprise. B) provides herself with control over a valuable good. C) reduces her personal popularity. D) produces all of the above consequences.
In order to determine a household's budget line, you must know the
A) prices of the goods bought and the household's income. B) prices of the goods bought, but not the household's income. C) household's income, but not the prices of goods bought. D) household's income, prices of the goods bought, and the household's preferences.
The CPI may overstate inflation for all the following reasons except
A) problems measuring changes in the quality of goods. B) substitution by consumers towards cheaper goods. C) problems measuring the quality of services. D) changes in Social Security benefits.
An incumbent announces it will significantly increase output in the next period, but only has contracts for the amount produced this period. The announcement is a
A) credible threat. B) non-credible threat. C) commitment. D) mixed strategy.