Suppose the CPI Was 95 in 1955, and Suppose Currently

question 115

Multiple Choice

Suppose the CPI was 95 in 1955, and suppose currently the CPI is 475. According to the CPI, $100 today purchases the same amount of goods and services as

• A) $20.00 purchased in 1955.
• B) $33.33 purchased in 1955.
• C) $47.50 purchased in 1955.
• D) None of the above is correct.

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Definitions:

Consumption Bundle

A combination of goods and services purchased by a consumer.

Total Utility

The overall satisfaction or benefit a consumer receives from consuming a particular amount of goods or services.

Gasoline

A volatile, flammable liquid derived from petroleum, primarily used as fuel in internal combustion engines.

Marginal Utility

The additional satisfaction or benefit (utility) that a person receives from consuming one more unit of a good or service.