What does a market do poorly?
A. Incentivize individuals to efficiently use society’s resources
B. Price labor based actually on marginal productivity
C. Promote equal income distribution
D. Allocate resources to their highest value uses
Answer: C
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If the cost of the CPI market basket at current period prices is $275 and the cost of the CPI market basket at base period prices is $350, the CPI is
A) 275. B) 79. C) 100. D) 350. E) 127.
The slope of an indifference curve at all points reflects
A. the terms by which the consumer can trade off goods in the market. B. the relative prices of the two goods. C. the willingness of the consumer to trade one good for another. D. consumer income relative to the price of a good. E. the relative price ratio of the two goods.
Linesha, a college student working part-time received a wage increase. An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs. Based on this information
A) DVDs and Blu-ray discs are substitutes. B) the cross-price elasticity between DVDs and Blu-ray discs is negative. C) DVDs and Blu-ray discs are normal goods. D) Blu-ray discs are normal goods and DVDs are inferior goods.
Replacing the simple Keynesian consumption function with the function based on the permanent-income hypothesis results in a ________ short-run multiplier, implying a ________ stable private economy
A) higher, more B) higher, less C) lower, more D) lower, less