Between 2017 and 2018, the CPI of a small nation rose from 182 to 185. If household incomes rose by 3% during that period of time, which of the following is true?
A) The purchasing power of household income rose between 2017 and 2018.
B) The purchasing power of household income fell between 2017 and 2018.
C) The purchasing power of household income remained constant between 2017 and 2018.
D) The CPI cannot be used to determine how the purchasing power of household income changes over time.
Answer: A
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Using the data in the above table, in the long-run macroeconomic equilibrium, the price level is ________ and the level of real GDP is ________
A) 115; $10 trillion B) 110; $10 trillion C) 105; $11 trillion D) 115; $11 trillion
You would expect the price elasticity of demand for transportation generally to be:
A. less than price elasticity of the demand for bus tickets. B. the same as price elasticity of the demand for bus tickets. C. greater than price elasticity of the demand for bus tickets. D. greater than price elasticity of the demand for bus tickets when bus tickets are expensive, but less than price elasticity of the demand for bus tickets when the prices of bus tickets fall.
If a boxing fight is shown on pay-per-view television every Saturday at 4pm, the demand curve for each fight is given below.
If the regulated pay-per-view charge to watch a fight were $15 per household, then ________ households would watch the fight, and the loss is total economic surplus would be ________ relative to when there is no charge to watch the fight.
A. 10 million; $225 million B. 10 million; $25 million C. 20 million; $25 million D. 20 million; $225 million
Table 16.2Consider the data in Table 16.2. Both firms can benefit if Firm A sells its pollution permit allowing it to generate 100 gallons of wastewater to Firm B for:
A. a price between $7 and $12. B. a price between $0 and $7. C. a price between $12 and $18. D. Both firms cannot benefit if A sells permits to B.