An increase in uncertainty about the future will tend to ________ precautionary saving and ________ the desired level of wealth for households

Suppose the Bureau of Labor Statistics uses Ballpark Franks as the hot dogs used when calculating the consumer price index. During 2012, Oscar Mayer aggressively reduces prices

Consumers respond by purchasing more Oscar Mayer and less Ballpark Franks. The 2012 CPI is likely to A) understate the average prices paid by consumers. B) overstate the average prices paid by businesses. C) overstate the average prices paid by consumers. D) understate the average prices paid by businesses. E) neither understate nor overstate the average prices because some consumers will still buy Ballpark Franks.

The point of tangency between a consumer's budget constraint and his or her indifference curve represents

a. complete satisfaction for the consumer. b. the equivalence of prices the consumer pays. c. constrained utility maximization for the consumer. d. the least he or she can spend.