If the Cost of Transportation and the Cost of Food

question 151

Multiple Choice

If the cost of transportation and the cost of food both increase by 30 percent,then,other things the same,how much is the CPI likely to increase?

• A)by about 3 percent
• B)by about 6 percent
• C)by about 9 percent
• D)by about 11 percent

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Definitions:

Specialization

The situation in which each person specializes in the task that he or she is good at performing.

Absolute Advantage

The ability of an individual or economy to produce a good or service more efficiently than competitors using the same amount of resources.

Cars

Motor vehicles with four wheels designed primarily for passenger transportation and commonly powered by internal combustion engines.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors, using fewer resources.