When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the
A) CPI measure tends to exceed the PCE price index measure.
B) PCE price index measure tends to exceed the CPI measure.
C) CPI measure and the PCE price index measure are equal.
D) CPI measure and PCE price index measure move in opposite directions.
E) CPI deflator and PCE price index cannot be compared because they measure prices of different baskets of goods and services.
A
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The use of money as a medium of exchange
I. lowers transaction costs. II. permits more specialization. A) I only B) II only C) Neither I nor II D) Both I and II
The consumer surplus enjoyed by the winner of a first-price sealed-bid auction is equal to the difference between ________
A) his value for the item being auctioned and the value of the lowest bid B) his bid and the second-highest bid C) his maximum willingness to pay for the good and his bid D) his bid and the market price of the item
In the short run, when a firm is about to begin production it pays only:
A) variable costs. B) opportunity costs. C) sunk costs. D) fixed costs.
Many basketball players and fans believe in the "hot hand." That is, they believe that a player is more likely to make a shot if that player has made several shots in a row
What does the hot hand hypothesis have to do with the idea of independent events? How might you test the hot hand hypothesis?