Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. What happens to the firm's inventory of computers if there is a negative demand shock and prices are inflexible?

How would the imposition of tariffs on imported leather boots be likely to affect domestic boot manufacturers?

a. Foreign competition would increase. b. Prices for domestic boots will be lower. c. Boot prices will rise and sales increase. d. Imports will outsell domestic boots.

The Consumer Price Index is

A. A measure of changes in the average price of consumer goods and services. B. A measure of changes in the average price of all goods and services. C. The impact felt by consumers who move into a higher tax bracket because of inflation. D. Used to measure the impact of business speculation on consumers.