Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Currently in sector Y, price is
A. equal to average cost.
B. less than average cost.
C. greater than average cost.
D. More information is needed to answer the question.
Answer: A
Economics
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If the GDP deflator is less than 100, then for that year, nominal GDP ________ real GDP
A) equals B) is greater than C) is less than D) may be greater than or less than
Economics
Suppose an individual consumes just pizza and soda. Using a graph, explain how the substitution bias causes the Lespeyres price index to overstate the true change in the cost of living resulting from an increase in the price of pizza.
What will be an ideal response?
Economics