Refer to Figure 10-3. Best friends Laurel and Hardy both enjoy watching romantic comedies and science fiction movies. Based on the diagrams above what can you conclude about their movie preferences?
A) The diagrams do not provide any information about relative preferences.
B) They have identical movie preferences.
C) Hardy enjoys romantic comedies more than Laurel.
D) Hardy enjoys science fiction movies more than Laurel.
D
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When aggregate demand decreases, product prices, wage rates, and per-unit production costs are inflexible downward because of a:
A. interest-rate effect. B. ratchet effect. C. real-balances effect. D. foreign-purchases effect.
An economy in which people exchange goods and services in a market is called a:
A. socialist economy. B. market economy. C. centrally planned economy. D. command economy.
A firm is producing a joint product, Product A and Product B, with variable proportions. At its current production levels, the marginal benefit of producing Product A is $2 and the marginal cost is $4 and the marginal benefit of producing Product B is $5 and the marginal cost is $3. To maximize profits, the managers of the firm should produce ________ of Product A and ________ of Product B.
A) more; more B) less; less C) less; more D) more; less
What is the best definition of quality bias?
a. failure to capture the savings that households enjoy when they change their spending in response to relative price changes b. failure to account for price changes to an item that result from product improvement c. overstating of the prices some buyers actually pay for goods from cheaper retail outlets d. failure to include new products into the Consumer Price Index until they become commonplace