If demand is price inelastic, then when price rises, total revenue
a. will fall.
b. will rise.
c. will remain unchanged.
d. may rise, fall, or remain unchanged. More information is need to determine the change in total revenue with certainty.
b
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The bias in the CPI distorts private contracts because
A) a future payment that is linked to the CPI is likely to be raised above the true increase in the price level. B) a worker that links her salary to the CPI is likely to be worse off than a worker that doesn't link her salary to the CPI. C) a lender that links the interest payments on the loan to the CPI is likely to be worse off than a lender that does not link the interest payments on the loan to the CPI. D) a future increase in a payment that is linked to the CPI is likely to be less than the true increase in the price level. E) the CPI cannot properly account for what goods and services a typical urban consumer buys.
If the dollar depreciates against the Indian rupee,
A) Indian imports to the U.S. become less expensive. B) The value of Indian imports to the United States does not change. C) U.S. exports to India become less expensive. D) U.S. exports to India become more expensive.
Our national income account underestimates our economic well-being because
a. it includes the underground economy, which is of negative value b. it ignores the value of work done by hired nannies c. it ignores the value of work done by householders (housewives or househusbands) d. it ignores the value of work done by salespeople who don't actually produce the goods and services e. it includes the value of pollution, along with the goods produced, which is actually a negative value
Demand is more inelastic for luxury goods.
Answer the following statement true (T) or false (F)