Since 1963 Prices Have Risen Every Year

question 129

Multiple Choice

Since 1963 prices have risen every year.As a result,the price of the poverty "basket" has risen as well.In 2009 it cost roughly $22,000 to purchase those same basic necessities for a family of four that cost only $3,000 in 1963.
-Which of the following explains why the U.S.poverty threshold increased from $3,000 per year in 1963 to $22,000 per year in 2009?

• A)Americans are more spoiled now than they were in 1963.
• B)The threshold includes more luxury items now than it did in 1963.
• C)Inflation has caused the price for basic necessities to increase since 1963.

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Definitions:

Total Utility

The complete gratification obtained through the consumption of a specific quantity of products or services.

Marginal Utility

The additional satisfaction or benefit (utility) that a consumer derives from consuming an additional unit of a good or service.

Scented Candles

Candles infused with fragrance oils or natural aromatic extracts intended to emit a pleasant aroma when lit.

Consumer Surplus

The contrast between the full amount consumers are willing to invest in a product or service and the actual payment they make.