Suppose the Price of a Litre of Milk Rises from $1

question 116

Multiple Choice

Suppose the price of a litre of milk rises from $1 to $1.25 and the price of a T-shirt rises from $8 to $10.If the CPI rises from 150 to 175,what will people likely buy?

• A) more milk and more T-shirts
• B) more milk and fewer T-shirts
• C) less milk and more T-shirts
• D) less milk and fewer T-shirts

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Definitions:

Highly Automated Industries

Sectors where machines and advanced technologies preponderantly perform production and operational processes, reducing human intervention.

Break-even Point

The point at which total revenues equal total costs and expenses, leaving no net loss or gain.

Margin of Safety

The difference between actual or expected sales and the sales level at which a company breaks even, providing a buffer against losses.

Unit Selling Price

The amount of money charged for one unit of a product or service.