When statisticians fail to allow for the possibility that consumers switch from products with rising prices to those whose prices are stable or falling, the CPI will tend to ________ the rate of inflation.
A. overstate
B. be unrelated to
C. precisely measure
D. understate
Answer: A
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It is clear that government provision of education is not necessary _____
a. because of the existence of private schools b. from the size of positive externalities c. because of the lack of asymmetrical information between parents and teachers d. because education externalities are negatively inframarginal
A(n) ______ statement is a subjective, contestable statement that attempts to describe what should be done.
a. objective b. positive c. normative d. negative
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Answer the following statement(s) true (T) or false (F)
A single-period duopoly firm can choose output level A or B. The firm decides it will produce level A regardless of what the other firm produces. This decision may occur because
A) producing the output level A is a dominant strategy. B) this firm has simply decided to always produce at level A. C) Both A and B are possible. D) None of the above.