Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2015 the CPI was 226. What does this "226" mean?
A) What cost $100 in 1983 on average cost 226 times as much in 2015.
B) What cost $100 in 1983 on average cost $226 more in 2015.
C) What cost $100 in 1983 on average cost 100/226 (or 0.44 ) times as much in 2015 (that is, it will cost $22 in 2015).
D) What cost $100 in 1983 on average cost $126 more in 2015.
D
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Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right.
If Candidate X is running against Candidate Z, by moving to the right Candidate X would:
A. force Z to move farther to the right in order to keep the same number of votes. B. lose some votes from voters on the far left but gain approximately the same number of votes from Z. C. win the election if the move placed X anywhere to the right of 25 on the spectrum. D. not lose any votes from voters on the left and gain some votes from Z.
The cross price elasticity of demand is (mathematically) the
A. percentage change in the quantity demanded of one good divided by the price of another good. B. percentage change in the quantity supplied of one good divided by the price of another good. C. percentage change in the quantity supplied of a good divided by the price of that good. D. percentage change in the quantity demanded of a good divided by the price of that good.