Assume an Economy That Is Producing Only One Product

question 163

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \\\hline 1 & 20 & \$ 4 \\\hline 2 & 25 & 4 \\\hline 3 & 30 & 6 \\\hline\end{array}$$ Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, the price index for year 1 is

• A) 80.
• B) 100.
• C) 120.
• D) 20.

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Definitions:

Water-Soluble

Capable of dissolving in water, a property of many vitamins and minerals that affects how they are absorbed and used in the body.

Carcinogens

Substances or exposures that are directly involved in causing cancer.

Aldehydes

A class of organic compounds obtained from alcohol by oxidation and also found in cigarette smoke; they cause mutations and are related to the development of cancer.

Tars

Complex chemical substances resulting from the burning or combustion of organic material, often associated with smoking.