Given the Data in Table 1A

question 35

Multiple Choice

Given the data in Table 1A.4.2,holding income constant,the graph relating the price of strawberries,measured on the y-axis and the purchases of strawberries,measured on the x-axis

• A)is a vertical line.
• B)is a horizontal line.
• C)is a positively sloped line.
• D)is a negatively sloped line.
• E)reaches a minimum.

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Definitions:

Paasche Index

Amount of money at current-year prices that an individual requires to purchase a current bundle of goods and services divided by the cost of purchasing the same bundle in a base year.

Nominal Income

The amount of money received in a specified period before adjusting for inflation.

Revealed Preference

An economic concept suggesting that the preferences of consumers can be observed by their purchasing habits and choices.

Inflation Level

Inflation level measures the rate at which the general level of prices for goods and services is rising, eroding purchasing power.