Consider a Small Economy in Which Consumers Buy Only Two

question 74

Multiple Choice

Consider a small economy in which consumers buy only two goods: apples and pears.In order to compute the consumer price index for this economy for two or more consecutive years,we assume that

• A)the number of apples bought by the typical consumer is equal to the number of pears bought by the typical consumer in each year.
• B)neither the number of apples nor the number of pears bought by the typical consumer changes from year to year.
• C)the percentage change in the price of apples is equal to the percentage change in the price of pears from year to year.
• D)neither the price of apples nor the price of pears changes from year to year.

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Definitions:

Contractual Notice

Formal communication, typically written, given by one party to another regarding terms or changes in a contractual agreement.

Implied Contract Terms

Terms judges read into employment contracts when the written contract does not expressly deal with the matter.

Employment Contracts

Written or implied agreements specifying the terms and conditions of an individual's employment.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.