Which of the following price indices is the best measure of the cost of living of the typical household?
A. GDP deflator
B. producer price index
C. consumer price index
D. household price index
Answer: C. consumer price index
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Suppose the market for bottled water is served by two oligopolists. If they reach an agreement to restrict production and charge a price above marginal cost, then:
A. neither firm will have an incentive to cheat on the agreement since it benefits them both. B. they will earn a larger profit than a monopolist would have earned. C. they will charge a higher price than a monopolist would have charged. D. their agreement is likely to eventually collapse.
The table below gives data on output for a firm in the short run. The firm is able to hire labor and its TPP is given. Compute the APP, MPP, and MRP for labor if the price of the good is fixed at $12 per unit. LABORTPPAPPMPPMRP14_______________29_______________315_______________421_______________526_______________630_______________733_______________835_______________936_______________
What will be an ideal response?
Assume you pay a premium of $0.70/bu for a call option with a strike price of $6.00/bu and that the current futures price is $6.50/bu. Then, the option is:
A. In-the-money B. At-the-money C. Out-of-the-money D. Worthless
If the average total costs is falling,
a. the marginal cost curve must be above the average total cost curve. b. the marginal cost curve must be below the average total cost curve. c. the MC curve is rising. d. the MC curve is horizontal (neither rising nor falling).