The market basket used to calculate the CPI in Aquilonia is 4 loaves of bread, 6 gallons of milk, 2 shirts, and 2 pairs of pants. In 2005, bread cost $1.00 per loaf, milk cost $1.50 per gallon, shirts cost $6.00 each, and pants cost $10.00 per pair. In 2006, bread cost $1.50 per loaf, milk cost $2.00 per gallon, shirts cost $7.00 each, and pants cost $12.00 per pair. Using 2005 as the base year,
what was Aquilonia's inflation rate in 2006?
a. 4 percent
b. 11 percent
c. 19.6 percent
d. 24.4 percent
d
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Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the T-shirt, then his consumer surplus is
A. $0.90. B. $19. C. $90. D. $1.
Consider two goods: peanuts and crackers. The slope of the consumer's budget constraint is measured by the
a. consumer's income divided by the price of crackers. b. relative price of peanuts and crackers. c. consumer's marginal rate of substitution. d. number of peanuts purchased divided by the number of crackers purchased.
Which of the following products will have more inelastic demand?
A. New cars. B. Fast food. C. Medicines. D. Fresh flowers.
Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. If demand for wheat is D3, then a profit-maximizing firm will produce ________ units and earn ________.
A. 9; positive profits B. 13; exactly a normal return C. 15; positive profits D. 12; negative profits