In Felixania,cat Food Constitutes 45 Percent of the Typical Basket

question 162

Multiple Choice

In Felixania,cat food constitutes 45 percent of the typical basket of goods for a typical consumer,dog food constitutes 3 percent,and all other goods constitute the remaining 52 percent.Assume the price of cat food rises by 4 percent,the price of dog food falls by 10 percent,and the prices for all other goods remain constant.Based on the information given,we can definitely say

• A) because all consumers are the same,all consumers must be worse off as a result of the change.
• B) because the goods included in the consumer price index (CPI)necessarily change from year to year,we can't determine the value of the new CPI.
• 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 Felixanian consumer price index (CPI).
• D) if consumers get a 4 percent pay raise,they are better off in terms of their real income compared to inflation as measured by the Felixanian consumer price index (CPI).
• E) menu costs have decreased.

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Definitions:

-ician

A suffix used to denote a practitioner or specialist in a certain field of study or profession.

-ist

A suffix used to denote a specialist in a certain field or a follower of a particular doctrine or method.

Combining Vowel

A vowel, often 'o', used in medical terms to ease the pronunciation between word roots and suffixes or between multiple roots.

Dentalgia

Pain located in a tooth or teeth, commonly known as toothache.