Economic Issues

Multiple Choice

The cost of hot dogs has gone down. How are hot god buns affected, if at all? Please choose the response that best illustrates how the market responds.

a. Supply of hot dog buns will increase

b. Hot do buns will not be affected.

c. Supply of hot dog buns will decrease.

d. Demand for hot dog buns will increase.

All of the following statements regarding the Consumer Price Index (CPI) are true EXCEPT?

a. CPI is used to calculate the rate of inflation.

b. CPI cannot report the general rise or decline in market prices

c. CPI is constructed based on the importance in the average consumer's budget.

d. None of the options are true.

Which of the following statements regarding supply and demand is true?

a. If supply increases, the demand for the good will decrease.

b. Demand is affected by a change in income.

c. Supply is affected by the availability of a substitute good.

d. Demand is affected by a change in input cost.