The CPI in period 1 is 200 and the CPI in period 2 is 150. The rate of inflation between period 1 and period 2 is
A. 75%.
B. -25%.
C. -50%.
D. -75%.
Answer: B
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An incumbent monopolist producing more output than necessary might be able to keep potential rivals from entering
A) by flooding the market with products below its marginal cost in the short run. B) if learning by doing reduces marginal cost. C) if the long-run marginal cost can be lowered below the potential entrant's short-run marginal cost. D) All of the above.
Bob got laid off six months ago. He used to go to the movies once a month, but he's only been twice because he lost his job. This type of behavior can be measured using:
A. the price elasticity of demand. B. the price elasticity of supply. C. the income elasticity of demand. D. the cross-price elasticity.
A tariff always lowers the well-being of each nation, including the nation imposing the tariff.
Answer the following statement true (T) or false (F)
For each $1 of a tax cut, economists expect consumption to
A. decrease by $1. B. decrease by less than $1. C. increase by less than $1. D. increase by $1.