In Bovania,milk Constitutes 56 Percent of the Typical Basket of Goods

question 109

Multiple Choice

In Bovania,milk constitutes 56 percent of the typical basket of goods for a typical consumer.Let's say the price of milk rises by 4 percent and the prices of all other goods fall by 10 percent.Based on the information given,we can definitely say

• A) the consumer price index (CPI)in Bovania is greater than in the previous year.
• B) the consumer price index (CPI)in Bovania is less than in the previous year.
• C) if consumers get a 4 percent pay raise,they are worse off in terms of their real income compared to inflation as measured by the Bovanian consumer price index (CPI).
• D) because milk is a necessity,consumers are automatically worse off no matter what pay increase they may have received.
• E) shoe-leather costs have decreased.

---

Definitions:

Healthy Rivalries

Competitive relationships that encourage improvement and excellence without leading to negative outcomes.

Available Resources

The assets, both tangible and intangible, that are at an organization’s disposal for use in achieving its objectives.

Geographical Structures

Organizational structures that are based on geographical regions, allowing companies to address local preferences and operations.

Differentiate Products

The process of distinguishing a product or service from others in the market to make it more appealing to a particular target segment.