Explain why economists care about inflation
What will be an ideal response?
Inflation will cause relative prices to change. It will also cause changes in the distribution of income. Inflation will lead to other distortions such as tax distortions and uncertainty.
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Refer to Table 4-1. The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of the champagne falls from $24 to $14
A) Larry and Moe will receive more consumer surplus than Curly. B) Curly will buy four bottles; Moe will buy two bottles, and Larry will buy one bottle. C) consumer surplus increases from $32 to $53. D) consumer surplus will increase from $80 to $95.
Sharecropping can be best understood as
(a) a type of agreement preferred by peasants. (b) a type of agreement preferred by landlords. (c) a compromise between peasant and landlord preferences. (d) a type of agreement preferred by neither but given by tradition.