Which of the following is correct?
a. The GDP deflator is better than the CPI at reflecting the goods and services bought by consumers.
b. The CPI is better than the GDP deflator at reflecting the goods and services bought by consumers.
c. The GDP deflator and the CPI are equally good at reflecting the goods and services bought by consumers.
d. The GDP deflator is more commonly used as a gauge of inflation than the CPI is.
b
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One reason that an efficiency wage leads to greater worker productivity is that:
A. earning more than the market wage gives workers an incentive to stay with the firm. B. it deters workers from trying to start a union. C. due to competition for their jobs, which are now desired, firms to pay less overall for a worker in the long run. D. it is set right at market equilibrium which creates an efficient labor market.
An increase in the money supply is more likely to be inflationary when
a. the economy is at less than full employment. b. the economy is at full employment. c. a surplus government budget exists. d. velocity is decreasing.
In short-run equilibrium in perfect competition,
a. each firm's profit is measured by P - ATC b. each firm's profit is measured by ATC - P c. each firm's (economic) profit is positive d. the amount sold by existing firms at the market price is exactly equal to the quantity consumers demand at that price e. no firm wishes to enter the market
People derive utility in their lives from consuming goods (all other goods), g, and clean air (measured as the number of particulates removed per m3), a, as measured with the utility function U(g,a) = g0.6a0.4. The price index of consumer goods equals $20 per day. Income equals $1000. What is likely to happen to the number of asthma cases as the price of clean air (abatement cost) increases from
$10 to $20? A) Asthma cases decrease because the particulates per m3 increase by 2 units. B) Asthma cases increase because the particulates per m3 decrease by 2 units. C) Asthma cases increase because the particulates per m3 increase by 2 units. D) There is not enough information to answer this question.