What is one way to adjust the CPI for substitution bias?
A) Use the Paasche index.
B) Use the Laspeyres index.
C) Multiply the Paasche Index and the Laspeyres index.
D) Take the geometric mean of the Paasche index and the Laspeyres index.
A
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A professional hockey franchise is trying to assemble a parcel of land to build an arena. There is one vacant warehouse on the land the franchise needs. In this case,
A) eminent domain will reduce transactions costs and make a pie-increasing arena possible. B) eminent domain will reduce the likelihood of holdouts and make a pie-increasing arena possible. C) eminent domain is not called for as the land can probably be acquired more efficiently through bargaining. D) Both A and B are correct.
Price-taking producers have horizontal marginal revenue curves.
Answer the following statement true (T) or false (F)
Producing more cabbage is efficient if
a. cabbage production can be increased without reducing production of other goods. b. the opportunity cost of more cabbage is less than its marginal utility. c. society values the additional cabbage more highly than the lettuce it must give up to produce the extra cabbage. d. All of the above are correct.
Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to less than that, and your average fixed costs will decrease. Finally, your average revenue will increase to $10, but your increase in revenue will be $10. You should
A. increase production by exactly 1 unit. B. increase production by at least 1 unit. C. leave production unchanged because profit is maximized where you are. D. redo the math associated with decreasing production because that may result in greater profit.