You can buy a season ticket to the Metropolitan Opera for $800. A season ticket plan to see the New York Knicks is $1600. Which of the following is a CORRECT statement?
A) The money price of opera tickets is 1/2 of a Knicks ticket per opera ticket.
B) The opportunity cost of a Knicks ticket is 2 opera tickets per Knicks ticket.
C) The relative price of an opera ticket is $800.
D) the money price of a Knicks ticket is 2 opera tickets per Knicks ticket.
B
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A simultaneous increase in both the demand for computers and the supply of computers must increase
a. the number of computers bought and sold. b. the price of computers. c. both the equilibrium price and quantity of computers. d. the shortage of computers in the market.
Ignoring any supply-side effects, to close a recessionary gap of $100 billion with a government expenditure multiplier of 5, the government could
A) increase government expenditure on goods and services by $100 billion. B) raise taxes by $100 billion. C) increase government expenditure on goods and services by $20 billion. D) raise taxes by more than $20 billion. E) decrease government expenditure on goods and services by $20 billion.
Commodity substitution bias in the CPI refers to the fact that the CPI
A) takes into account the substitution of goods by consumers when relative prices change. B) takes no account of the substitution of goods by consumers when relative prices change. C) substitutes quality changes whenever they occur without taking account of the cost of the quality changes. D) accounts for improved quality in price rises. E) substitutes relative prices for absolute prices of goods.
When a tax is proportional, the average tax rate:
A. first increases with income, then decreases with income. B. is constant with income. C. decreases with income. D. increases with income.