Suppose shoppers typically pay twice as much for frozen "convenience" foods compared to similar dinners they could prepare themselves. An economist would say
A) the purchase is inefficient because the consumer doesn't really need to pay twice as much for essentially the same dinner.
B) the purchase is inefficient because the frozen dinner is of even lower quality than the homemade dinner, yet twice as expensive.
C) the purchase is efficient if the consumer feels the savings in preparation time justifies the higher price.
D) the purchase is efficient, but the consumer is still probably behaving irrationally.
C
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The typical bundle of goods and services on which the GDP deflator is based
a. is narrower than the one used to calculate the CPI. b. is updated once every decade. c. is the same as the one used to calculate the CPI. d. is updated every year.
Which of the following would shift a nation’s entire production possibilities curve outward?
a. moving from less than full employment to full employment. b. developing a more efficient technology. c. more efficiently allocating productive resources already available. d. All of these.