Suppose That Last Year the Price of Strawberries Was $2

question 4

Multiple Choice

Suppose that last year the price of strawberries was $2 and the price of milk was $1. This year, the price of milk is $2 and the price of strawberries is $1. Which of the following statements is true?

• A) The CPI increases because milk is more expensive.
• B) The change in the CPI depends on how the market basket changed between the two years.
• C) The CPI might increase or decrease depending on the quantities in the CPI market basket.
• D) The CPI does not change because the change in the two prices is the same.
• E) The CPI decreases because strawberries are cheaper.

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Definitions:

Asthenosphere

The area of mantle beneath the lithosphere that is solid, but hotter than the rock above it and can flow under pressure; functions as a soft, weak zone over which the lithosphere may move.

Crustal Blocks

These are large areas of the Earth's crust that have moved together or apart due to tectonic activity.

Isostatic Adjustment

The equilibrium adjustment of the Earth's crust due to changes in load (such as the melting of glaciers), affecting the crust's vertical movement.

Significant Erosion

The process whereby soil, rock, and other surface material are removed from one location and transported elsewhere, typically by wind, water, or ice, in a manner that noticeably alters the landscape.