Suppose prices of personal computers fall significantly and consumers respond by buying more personal computers. The consumer price index
a. reflects this price decrease accurately.
b. understates this price decrease due to the substitution bias.
c. overstates this price decrease due to the income bias.
d. overstates this price decrease due to the substitution bias.
b
Economics
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Refer to the figure above. What is the producer surplus in the market?
A) $20 B) $40 C) $60 D) $80
Economics
When a sales tax is imposed on sellers, the supply curve shifts so that the vertical distance between the old and the new supply curve equals the
A) sales tax multiplied by the price elasticity of demand. B) sales tax multiplied by the price elasticity of supply. C) amount of the sales tax. D) sales tax divided by the price elasticity of demand.
Economics