If the Value of the Consumer Price Index (CPI)in 2013

question 174

Multiple Choice

If the value of the consumer price index (CPI) in 2013 was 135 and the value of the CPI in 2012 was 117,we could correctly say that the

• A) typical basket of goods was about 18 percent more expensive in 2013 than in 2012.
• B) typical basket of goods was about 18 percent less expensive in 2013 than in 2012.
• C) typical basket of goods was about 15.4 percent more expensive in 2013 than in 2012.
• D) average price of all items included in gross domestic product (GDP)was about 18 percent more expensive in 2013 than in 2012.
• E) average price of all items included in gross domestic product (GDP)was about 15.4 percent more expensive in 2013 than in 2012.

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Definitions:

Equilibrium Quantity

The level of goods or services offered and demanded at the price of equilibrium.

Labor

The effort involving both mental and physical capacities of humans utilized in creating goods and services.

Marginal Productivity Theory

A principle in economics that states the compensation of a factor of production, like labor, depends on the marginal productivity of that factor.

Perfectly Competitive

Refers to markets that meet the criteria of perfect competition, ensuring no single buyer or seller can influence prices or market conditions.