Assume that consumers consider rice and potatoes to be substitutes, so that when the price of rice rises, consumers purchase less rice and more potatoes. When the CPI is computed following the increase in the price of rice, it takes into account
a. the increase in the price of rice.
b. the decrease in the quantity of rice purchased and the increase in the quantity of potatoes purchased.
c. Both (a) and (b) are correct.
d. None of the above is correct.
a
Economics
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Which of the following are considered factors of production used to produce goods and services?
I. Land II. Labor III. Capital IV. Entrepreneurship A) I and II only B) I and III only C) I, II and III only D) I, II, III and IV
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If a single-price monopolist sets price where the price elasticity of demand exactly equals 1, its
A) total profits are at a maximum. B) total revenue is at its maximum. C) total revenue is rising, although marginal revenue is falling. D) total revenue is falling. E) marginal revenue is always positive.
Economics