Under which of the following conditions will there be no substitution bias in the CPI?
A) Indifference curves are convex.
B) Indifference curves are L-shaped.
C) Indifference curves are linear.
D) Indifference curves are downward sloping.
B
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In the figure above, the redistribution from the consumers to the producer if the firm is a single-price, unregulated monopoly rather than a perfectly competitive industry is
A) zero. B) $8.00 per day. C) $16.00 per day. D) $32.00 per day.
Which of the following is an example of moral hazard?
A. A college student drinking alcohol and partying instead of studying. B. A homeowner with fire insurance not clearing bush around their property. C. A chronically sick person using hospital services. D. A chronically sick person buying more health insurance than average.
Why don't the local prices of restaurant meals, haircuts, and gardening services affect a country's exchange rate?
What will be an ideal response?
Other things equal, if more firms enter a monopolistically competitive industry:
A. the demand curves facing existing firms would shift to the right. B. the demand curves facing existing firms would shift to the left. C. the demand curves facing existing firms would become less elastic. D. losses would necessarily occur.