To Compare the Real Price of Gas in 1975 to the Real

question 122

Multiple Choice

To compare the real price of gas in 1975 to the real price in 2011, we need to know

• A)just the two nominal prices in both years.
• B)the two prices in both years and the inflation rate in 2011.
• C)the two prices in both years and the CPI in both years.
• D)the two prices in both years and the two interest rates in both years.
• E)the two prices in both years and the two inflation rates in both years.

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Definitions:

Metal Alloy

A substance composed of two or more metals or a metal and a non-metal, mixed together to attain desired physical or chemical properties.

Fixed Proportions

A production technology assumption where inputs must be used in constant, unchanging ratios to produce outputs.

Average Cost

The total cost of production divided by the number of units produced, representing the cost per unit of output.

Production Function

An equation that specifies the output that can be produced with different combinations of inputs or factors of production.