Rank these three items in terms of the elasticity of the demand for them at any given price, from most elastic to least elastic: hot beverages, coffee and Peet's Coffee
A) hot beverages, coffee, Peet's Coffee B) coffee, Peet's Coffee, hot beverages
C) Peet's Coffee, coffee, hot beverages D) coffee, hot beverages, Peet's Coffee
C
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Suppose manufacturers introduce a new model car to replace a car currently included in the CPI basket. The price of the new car is 10 percent higher than the discontinued model, but the new car has additional safety features and amenities. In this situation the CPI will tend to ________ inflation as a result of ________ bias.
A. accurately measure; substitution B. understate; quality adjustment C. overstate; quality adjustment D. overstate; substitution
If firms were forced to take into account the full social costs of production, then
A) output would decrease but pollution levels would probably remain at the same levels. B) output would be unaffected but pollution levels would come down. C) output and pollution levels would decrease. D) output could be increased and pollution levels would decrease.
Which of the following statements is FALSE?
A) The rationing function of prices is not allowed to freely operate when the government imposes price controls. B) Price controls may take the form of price ceilings or price floors. C) Price ceilings below the equilibrium price can cause black markets to develop. D) Rent controls are examples of price floors.
The cumulative voting system used by firms in the election of directors allows:
A. a large minority shareholder to elect some directors even if their election is opposed by the majority of shareholders. B. the blockholders to elect some directors even though they are barred from participating in the internal decision making. C. large shareholders to nominate board members through the normal proxy process without any legal binding. D. the prospective candidates for the board of directors to manipulate the federal laws and regulation.