The fact that the price of diamonds is higher than the price of water
A. can be explained as the outcome of a consumer optimum in consumer choice theory.
B. is an outcome of irrational behavior in consumer choice theory.
C. cannot be explained by behavioral economics or consumer choice theory.
D. can be explained only by behavioral economics but not by consumer choice theory.
Answer: A
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The CPI is a measure of the overall cost of the goods and services bought by
a. a typical consumer, and the CPI is computed and reported by the Department of the Treasury. b. typical consumers and typical business firms, and the CPI is computed and reported by the Department of the Treasury. c. a typical consumer, and the CPI is computed and reported by the Bureau of Labor Statistics. d. typical consumers and typical business firms, and the CPI is computed and reported by the Bureau of Labor Statistics.
Technological advance improves productivity in a purely competitive industry. This change will result in a shift:
A. Down of the individual firm's MC curve, causing the market supply curve to shift to the left B. Down of the individual firm's MC curve, causing the market supply curve to shift to the right C. Up of the individual firm's MC curve, causing the market supply curve to shift to the left D. Up of the individual firm's MC curve, causing the market supply curve to shift to the right