The CPI is a measure of the
A) Percentage change in the price level.
B) Average prices of all goods.
C) Average prices paid by consumers for a fixed basket of goods and services.
D) Average prices of all goods and services produced.
Answer: C) Average prices paid by consumers for a fixed basket of goods and services.
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The table above shows Mary's utility from chips and soda. The table shows that
A) Mary prefers sodas to chips. B) Mary will consume no soda and only chips. C) Mary's marginal utility decreases as she consumes more chips. D) Mary's total utility decreases as she consumes more chips.
In the above figure, points u, v, y, and z show
A) an inefficient allocation of society's scarce resources. B) possible combinations of televisions and personal computers. C) a constant trade-off between televisions and personal computers. D) that society prefers more televisions than computers.
In order to maximize profits, a firm should produce at the output level for which:
a. average cost is minimized. b. marginal revenue equals marginal cost. c. marginal cost is minimized. d. price minus average cost is as large as possible.
Which of the following changes should make activist policy makers more confident in their capacity to make good policy recommendations?
A) structural change in the economy B) changes in multipliers C) a longer estimated lag for monetary policy D) none of the above