Refer to Table 9-13. Consider a simple economy that produces only three products: tacos, earplugs, and toothbrushes. Use the information in the table to calculate the inflation rate for 2016, as measured by the consumer price index
What will be an ideal response?
Total expenditures for 2001 = (5 × $1.50 ) + (10 × $6.00 ) + (3 × $2.50 ) = $75.00.
Total expenditures for 2015 = (5 × $2.00 ) + (10 × $7.50 ) + (3 × $3.50 ) = $95.50.
Total expenditures for 2016 = (5 × $2.25 ) + (10 × $7.00 ) + (3 × $3.50 ) = $91.75.
The CPI for 2015= [($95.50/$75.00 ) × 100] = 127.33
The CPI for 2016 = [($91.75/$75.00 ) × 100] =122.33.
So, the inflation rate for 2016 = [((122.33 ? 127.33 )/127.33 ) × 100 )] = ?3.9%.
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"Because of rent seeking, a monopoly may end up earning a normal profit." Is the previous statement correct or incorrect? Why?
What will be an ideal response?
If the income-consumption path slopes upward, then:
A. both goods are normal goods. B. both goods are inferior goods. C. the goods are substitutes. D. the goods are complements.
Which of the following statements about rent control is false?
A. Rent control is an effective way to help the poor. B. Many wealthy and famous people benefit from rent control. C. A person does not have to be poor to qualify for a rent-controlled apartment. D. All of these are false statements.
Refer to the information provided in Table 19.8 below to answer the question(s) that follow.Table 19.8Total IncomeTotal Taxes$20,000 $2,000 40,000 4,800 60,000 9,000 80,000 16,000Related to the Economics in Practice on page 393: Refer to Table 19.8. The tax rate structure in this example is
A. marginal. B. progressive. C. proportional. D. regressive.