Between 2015 and 2016, the CPI of a small nation rose from 182 to 185. If household incomes rose by 3% during that period of time, which of the following is true?
A) The purchasing power of household income remained constant between 2015 and 2016.
B) The purchasing power of household income rose between 2015 and 2016.
C) The purchasing power of household income fell between 2015 and 2016.
D) The CPI cannot be used to determine how the purchasing power of household income changes over time.
B
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Tourists in foreign countries are often charged more for hand-made items at tourist shops compared to the local customers. Why?
A) The tourists are typically less informed than the local customers. B) The tourists typically have fewer available alternatives compared to the local customers. C) The shop owners can usually identify tourists. D) For all of the above reasons.
If the bidders at an oral auction have true values of $78, $72, $66, and $65, the item will sell for
a. $78 b. just under $78 c. $72 d. just over $72
Average product curve tells us:
A. the level of inputs that are the most productive. B. the cost-minimizing level of inputs to hire. C. the profit-maximizing level of inputs to hire. D. All of these are true.
Some enterprising individuals produce and sell alcoholic beverages without collecting or paying legally required taxes. These “moonshiners” often have to hide their production facilities and hire fast driving delivery personnel to avoid various authorities. These moonshiners
A. are taking advantage of obvious loopholes in the tax rules. B. are making the alcohol taxes more regressive by altering who pays the taxes. C. are indicative of the tax’s excess burden even if their actions may reduce excess burden relative to no moonshining. D. are able to avoid the tax burdens on the moonshined alcohol assuming they are not caught and fined by the authorities.