Chicken Becomes More Expensive in 2008 at Wegmans in State

question 169

Multiple Choice

Chicken becomes more expensive in 2008 at Wegmans in State College,Pennsylvania.This means

• A) the consumer price index (CPI)will rise in 2008 if,and only if,State College is one of the 38 geographic locations and chickens are one of the 8,000 goods included in the CPI.
• B) the consumer price index (CPI)will almost certainly rise in 2008,even if State College is not included,as long as chicken is included and becomes more expensive on average at the indexed locations.
• C) the consumer price index (CPI)will likely fall if the average weighted price of chicken increases in the United States and the price of chicken at Wegmans makes almost no difference in the CPI.
• D) the consumer price index (CPI)might rise or fall and the price of chicken at Wegmans could make a very small difference in the CPI if chicken at Wegmans is included in the index.However,chicken would be a relatively small portion of the entire CPI,if it is included at all.
• E) chicken prices are never included in the consumer price index (CPI)because the creator of the CPI,James Gapinski,did not like chickens.

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Definitions:

Inventory

The total amount of goods and materials a business has in stock, either for sale or used in production.

Purchase Price

The amount of money paid to buy goods or services.

Merchandise Inventory

Goods or products that a retailer or wholesaler has purchased and intends to sell to customers.

Periodic System

An inventory system where inventory levels are updated in the accounting records on a periodic basis, typically at the end of an accounting period, rather than after each purchase or sale.