If an auto manufacturer installs antilock brakes on a vehicle, and that alone causes the price to increase by $100, the BLS
A. does not count that increase as part of the inflation rate.
B. counts only half of the price increase as part of the inflation rate.
C. subtracts that price increase from the overall inflation rate.
D. counts that increase as part of the inflation rate.
Answer: A
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The table above represents five points on the production possibility frontier for the small country of Baca, which produces only rugs (measured in thousands) and wheat (measured in thousands of bushels): If the economy is currently at point A,
what is the opportunity cost of producing an additional 10,000 bushels of wheat? If the economy is currently at point B, what is the opportunity cost of producing an additional 10,000 bushels of wheat? What if the economy is currently at point D?
Customers are usually more willing to pay more for the first unit of a good they purchase than for the second, third, or subsequent units. This implies that
A) typical consumers are irrational. B) firms are using non-linear price discrimination. C) firms are unable to determine their customers' reservation prices. D) typical consumers have a downward sloping demand curve.
The number of transactions a typical dollar is used in during a given period is called the:
A. velocity of money. B. transaction rate. C. quantity theory of money. D. transaction velocity.
Several years ago while teaching in Russia, I was using a production function like the ones used in this text. Output is a function of labor, capital and technology. One professor asked me how I could talk about production without including all the inputs that go into the process. Write a response to this professor from what you know of a production function.You should focus on the concept of value added production.
What will be an ideal response?