As Part of Computing the CPI, About How Many Items

question 17

Multiple Choice

As part of computing the CPI, about how many items are priced each month in order to come up with an average price paid by all families in the U.S.for each item in the market basket?

• A)800
• B)8,000
• C)80,000
• D)800,000

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a product for which each seller offers an essentially identical item.

Efficient Outcomes

An economic condition whereby resources are allocated in the most effective manner, maximizing overall welfare.