With respect to the consumer price index, which of the following serves as an example of how the substitution bias arises? Between 2010 and 2011, the price of a pound of peanuts
a. rises from $0.80 to $1.00 while the price of a loaf of bread rises from $2.00 to $2.50.
b. falls from $0.90 to $0.72 while the price of a loaf of bread falls from $2.00 to $1.60.
c. remains constant, as does the price of a loaf of bread.
d. None of the above serves as an example of how the substitution bias arises.
d
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If two countries agree to specialize and trade based on comparative advantage, which of the following is most likely to be TRUE?
A) Both of the countries will consume outside their respective production possibilities curves. B) One of the countries will end up receiving all of the gains from trade. C) One of the countries will both consume and produce on its production possibilities curve. D) Only one of the countries will produce on and consume outside its production possibilities curve.
The Phillips curve appeared to fit the data well for the United States in the
A) 1960s. B) 1970s. C) 1980s. D) 1990s.
Which of the following represents a normative statement? a. A decrease in price leads to an increase in quantity demanded
b. The study of economics is more important than the study of history. c. People will buy less butter at $1.50 per pound then they will at $1.00 per pound. d. As an economy develops, the nation's birth rate tends to fall.
A person's decision to supply a certain amount of labor in a week is simultaneously a decision to consume a certain amount of leisure per week
a. True b. False Indicate whether the statement is true or false