Changes in business inventories will be positive when
A) production exceeds sales.
B) production is less than sales.
C) a trade surplus exists.
D) a budget surplus exists.
A
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Suppose the CPI does indeed overstate the inflation rate. When the CPI increases by 5% and household incomes increase by 5%, we should conclude that real incomes of households have:
A. increased more slowly than has inflation. B. increased. C. decreased. D. stayed constant.
How would an increase in prices in retail stores change the real value of the money you earn as wages?
What will be an ideal response?
If the firm in Figure 17-4 above maintains its set price of P0, rather than dropping price to P1, the welfare loss to society due to this decision is
A) J + K. B) K - G. C) G + H. D) H + K. E) F + G + H.
The marginal revenue product of a resource:
A. is defined as the marginal product of the resource multiplied by the resource price. B. simply means that a firm should add to its capital stock as long as competition requires it. C. equals the extra output produced by an additional unit of the resource multiplied by the price of that output. D. equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.