The nominal price of industrial red paint was $12 per gallon in 1993. To convert this value to the real price of paint in 2012 dollars, we should use the:
A) Consumer Price Index.
B) Producer Price Index
C) Fed funds rate.
D) 30-day T-bill rate.
B
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A free lunch (the absence of a tradeoff) when the production of a good is increased is possible for the entire economy only if
A) resources are used inefficiently. B) there is a movement along the PPF. C) prices are decreased. D) prices are increased. E) less of some product is produced.
A government ban on a good that suffers from overconsumption may be ineffective if the:
A. likelihood of being caught breaking the ban is sufficiently high. B. likelihood of being caught breaking the ban is very low. C. punishment for breaking the ban is severe. D. public did not participate in setting the punishments.
In the 1980s, Howard was one of the best car phone repairmen in his area. After staying home in the 1990s and early 2000s to take care of his children, Howard wants to go back to work in the phone repair business. Which of the following can be said about Howard?
A. Because car phones are obsolete, Howard's human capital is less valuable. B. Howard's knowledge of how to repair car phones is obsolete, and his human capital is less valuable now than in 1980. C. Howard's ability to repair car phones represents an obsolete skill. D. All of these could be said about Howard.
When average total cost is decreasing as output expands: a. average fixed cost must be increasing
b. average variable cost must be falling. c. marginal cost must be greater than average total cost. d. marginal cost must be less than average total cost.