The Price Index for the Current Year Is 180, Which

question 9

Multiple Choice

The price index for the current year is 180, which means that, on average, prices in the current year are

• A) $.80 higher than prices in the base year.
• B) $1.80 higher than prices in the base year.
• C) 80 percent of prices in the base year.
• D) 180 percent higher than prices in the base year.
• E) 80 percent higher than prices in the base year.

---

Definitions:

Long-Run Equilibrium

a state in which all factors of production can be adjusted, and all firms in the market are making zero economic profits, reflecting a situation of perfect competition.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit; essentially, the cost of producing one more unit of a good.

Product-Variety Externality

An economic effect where an individual's consumption choices can lead to an increase in the variety of products available, potentially benefiting other consumers.