Suppose there are only two goods (Good A and Good B) and the average person buys 4 of Good A in a year and 3 of Good B. If, in the base year, the Price of Good A is $5 and the Price of Good B is $10, and in the next year the Price of Good A is $6 and the Price of Good B is $9, the price index in the second of the two years
A. is 101.
B. is 51.
C. is 100.
D. is 102.
Answer: D
You might also like to view...
The marginal productivity theory is irrelevant to organizing production in a socialist society.
Answer the following statement true (T) or false (F)
Which of the following is false of perfectly competitive firms? a. As new firms enter an industry where sellers are earning economic profits, the result will include a reduction in the equilibrium price. b. In a constant-cost industry, the industry does not use inputs in sufficient quantities to affect input prices
c. In a constant-cost competitive industry, the long-run effect of an increase in demand is an increase in industry output but no change in the industry price. d. All are true.
An increase in supply will always
A. decrease consumer surplus. B. increase producer surplus. C. decrease producer surplus. D. increase consumer surplus.
Richard is consuming X and Y so that he is spending his entire income and MUx/Px = 6 and MUy/Py = 10. To maximize utility, he should
A. continue to consume the same amount of X and Y since he is already maximizing utility. B. consume less of both X and Y. C. consume less X and more Y. D. consume more X and less Y.