A market basket:
A. looks like a really long shopping list for what firm’s typically purchase.
B. includes specific goods and services in fixed quantities that roughly correspond to a typical consumer's spending.
C. onlyincludes housing, food, and clothing, but not things like transportation.
D. is what an economist creates in order to understand purchasing trends of households and firms.
B. includes specific goods and services in fixed quantities that roughly correspond to a typical consumer's spending.
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Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream
If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects A) decreasing opportunity costs. B) a bowed out PPF for banking services and ice cream. C) production efficiency. D) a shift to a flatter PPF.
What is a price floor?