The marginal propensity to consume is a measure of the additional consumption that results from a one-dollar increase in disposable income

Consider the market for automobile transportation services, which are produced by taxicabs, buses, and companies like Uber and Lyft. Suppose that the federal government imposes a tax on producers of transportation services, and a separate tax on consumers of transportation services. What would you expect to happen to the equilibrium quantity and price of transportation services?

a. The equilibrium quantity decreases and the equilibrium price decreases. b. The equilibrium quantity decreases and the equilibrium price increases. c. The equilibrium quantity increases, and the change in the equilibrium price is ambiguous. d. The equilibrium quantity increases and the equilibrium price increases. e. None of the above.

Which of the following biases the CPI to underestimate increases in prices?

a. The substitution bias b. The quality bias c. The new outlet bias d. None of the above