Which of the Following Statements Is True

question 131

Multiple Choice

Which of the following statements is true?

• A)Even if we know the values of the consumer price index for the years 2009 and 2010,we cannot calculate the inflation rate for 2010 if we do not know which year is the base year.
• B)If we know the base year is 1990,and if we know the value of the consumer price index for the year 2010,then we have all the information we need to calculate the inflation rate for 2010.
• C)If we know the base year is 2000,and if we know the value of the consumer price index for the year 1995,then we have all the information we need to calculate the inflation rate for 1995.
• D)If we know the base year is 2000,and if we know the value of the consumer price index for the year 1995,then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000.

Distinguish between monopoly and monopsony power in markets.

Calculate deadweight loss, consumer surplus, and producer surplus in monopoly markets.

Understand the economic rationale for government intervention in natural monopolies.

Apply economic theory to recommend regulatory policies for monopolies.

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Definitions:

Bidding Contest

A competitive process in which individuals or entities submit offers to win the rights to acquire goods, services, or assets.

Governmental Agency

An organization at the local, state, or national level that provides a specific service or performs a regulatory function on behalf of the government.

Policy Innovation

The creation or adoption of new policies which aim to address existing challenges in more effective or efficient ways.

Ambitious Changes

Significant alterations or reforms aimed at achieving substantial improvements or advancements.