If the CPI Is 100 in the Base Year and 112

question 56

Multiple Choice

If the CPI is 100 in the base year and 112 in the current year,how much did prices rise between the base year and the current year?

• A) 12 percent
• B) 112 percent
• C) 1.2 percent
• D) 0.12 percent

---

Definitions:

Marginal Revenue Product (MRP)

The change in a firm’s total revenue when it employs 1 additional unit of a resource (the quantity of all other resources employed remaining constant); equal to the change in total revenue divided by the change in the quantity of the resource employed.

Land

In addition to the part of the earth’s surface not covered by water, this term refers to any and all natural resources (“free gifts of nature”) that are used to produce goods and services. Thus, it includes the oceans, sunshine, coal deposits, forests, the electromagnetic spectrum, and fisheries. Note that land is one of the four economic resources.

Demand Curve

A curve that illustrates the demand for a product by showing how each possible price (on the vertical axis) is associated with a specific quantity demanded (on the horizontal axis).

Economic Rent

The price paid for the use of land and other natural resources that are in fixed (perfectly inelastic) supply.