Suppose the CPI does indeed overstate the inflation rate. When the CPI increases by 5 percent and household incomes increase by 5 percent, we should conclude that real incomes of households have:

Based on the figure above, as a result of international trade, U.S. domestic production ________ million T-shirts per year

A) decreases by 20 B) decreases by 10 C) increases by 40 D) increases by 20 E) increases by 10

An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if

A) the incumbent can still earn a profit after carrying out the threat. B) the incumbent earns greater profit carrying out the threat than by accommodating entry. C) the potential entrant cannot earn a profit if the threat is carried out. D) the potential entrant's profit exceeds the incumbent's if the threat is carried out.