List three different price indices and explain how they differ in terms of the market basket on which they are based
What will be an ideal response?
Three examples of price indices are the GDP deflator, the consumer price index, and the producer price index. All three differ by the kinds of goods that are contained in the market basket that is used to calculate the average level of prices. The GDP deflator is based on the average price of all final goods and services produced. The consumer price index is based on the average price of 211 goods/services purchased by the typical urban family of four. The producer price index is based on the prices received by producers of goods and services at all stages of the production process.
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Why does unemployment not go to zero during booms?
What will be an ideal response?
Refer to the diagram, where variable inputs of labor are being added to a constant amount of property resources. Average variable cost will be at a minimum when the firm is hiring:
A. Q 3 workers.
B. Q 2 workers.
C. Q 1 workers.
D. more than Q 3 workers.