Suppose the consumer price index (CPI) for Year X is 130 . This means the average price of goods and services is
a. currently $130.
b. 130 percent more in Year X than in the base year.
c. 130 percent more in the base year than in Year X.
d. priced at 30 percent more in Year X than in the base year.
D
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Consider the monopolistic competition, entry, and exit curve. Which of the following would cause both the perceived demand curve and the marginal revenue curve to shift to the right?
a. Gains induce new firms to leave the industry, causing demand from the original firm to fall. b. Gains induce new firms to leave the industry, causing demand from the original firm to rise. c. Losses induce firms to leave the industry, causing demand from the original firm to fall. d. Losses induce firms to leave the industry, causing demand from the original firm to rise.
A federally funded, state-administered program that pays medical and hospital costs for welfare recipients and other low-income people is
a. Medicare b. federal HMO c. state HMO d. Fedicare e. Medicaid
Incorporation of expectations into economic decision making and the economic experience of recent decades indicate that in the long run
a. inflation relates directly to unemployment. b. inflation is inversely related to unemployment. c. there is no trade-off between inflation and unemployment. d. high unemployment is a primary cause of inflation.
Costs increase with output in an increasing-cost industry because:
A. input prices increase as the industry competes for scarce resources. B. firms may be forced to use less productive inputs. C. the firms become monopolies. D. Both input prices increase as the industry competes for scarce resources and firms may be forced to use less productive inputs are correct.