Substitution bias occurs because the CPI ignores the possibility of consumer substitution toward goods that have become relatively less expensive

Which of the following is an example of a production function with fixed proportions?

A) putting orange juice into cartons B) mowing lawns C) cutting hair D) teaching economics

Answer the following questions true (T) or false (F)

1. In the long-run equilibrium, both the perfectly competitive firm and the monopolistically competitive firm produce the output at which MR=MC and charge a price equal to the average total cost of production. 2. Most economists believe that consumers would be better off if markets were perfectly competitive rather than monopolistically competitive. 3. An oligopolistic industry is characterized by a few large firms acting independently.