A Customer Who Buys Coke and Dr

question 28

Multiple Choice

A customer who buys Coke and Dr. Pepper all the time, and no other brands, holds these two products as:

• A) quality brands
• B) price brands
• C) top-choice brands
• D) continuous choices

Analyze changes in total surplus resulting from price changes.

Determine the equilibrium quantity and price in a market.

Understand the concept of producer surplus and how it is affected by market changes.

Calculate changes in consumer surplus due to shifts in price.

---

Definitions:

Real Rate of Interest

The rate of interest an investor expects to receive after allowing for inflation, distinguishing from the nominal rate of interest, which does not account for inflation.

Deflation

A decrease in the general price level of goods and services in an economy over a period.

CPI

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Base Year

A specific year against which economic growth, prices, or other economic indicators are measured and compared.