The consumer price index or CPI includes
A) The cost of a standard market basket bought by consumers in the current year.
B) The cost of a standard market basket bought by consumers in the current year relative to a base period.
C) The cost of a standard market basket bought by producers in the current year.
D) The cost of a standard market basket bought by producers in the current year relative to a base period.
Answer: B
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In a marketplace, the rental price of apartments is determined by:
A) negotiations between landlords and regulators. B) negotiations between renters and regulators. C) negotiations between renters and landlords. D) negotiations between politicians and regulators.
A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8 and MR = $9, in order to maximize profits (or minimize losses), this firm should:
a. reduce output. b. increase output. Correct c. shut down. d. do nothing; the firm is already maximizing profits.
In the above figure for a monopolistically competitive firm, the profit-maximizing output and price are respectively
A. 50 units and $8. B. 80 units and $11. C. 60 units and $9. D. 60 units and $14.
Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs. Japan and Mexico can realize mutual gains if the terms of trade are
a. greater than 80 basketballs per rocking chair, and Japan produces rocking chairs b. between 50 and 80 basketballs per rocking chair, and Japan produces basketballs c. greater than 80 basketballs per rocking chair, and Mexico produces basketballs d. less than 50 basketballs per rocking chair, and Japan produces basketballs e. between 50 and 80 basketballs per rocking chair, and Japan produces rocking chairs