Surveys show that a small increase in the price of organic potatoes will cause most people to switch to other alternatives such as packaged mashed potatoes. This finding suggests that the demand curve for organic potatoes is

If your nominal income is $80,000 and your real income in base year prices is $71,500, what is the CPI?

A) 106 B) 150 C) 112 D) 100 E) 89

Refer to Figure 10.2. Assume the economy is initially at equilibrium at potential GDP of $500 billion. If the MPC = 0.80 , and real GDP falls to Y2 = $400 billion, the vertical distance between AE1 and AE2 must be

A) $8 billion. B) $20 billion. C) $80 billion. D) $100 billion.