What Does the PPI Measure

question 10

Multiple Choice

What does the PPI measure?

• A)the average change in the prices paid for all goods produced in the economy over a given year
• B)the average of the prices received by producers of goods and services at all stages of the production process
• C)the level of production of goods and services generated in the economy in a given year
• D)the difference between the prices consumers pay for goods and services and the prices producers pay for goods and services
• E)the average change in prices paid by producers for their factors of production

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Definitions:

Upward Sloping

A line on a graph that shows an increase in a certain variable as another variable increases.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and therefore, should not be considered in making future economic decisions.

All-Day Ticket

A pass that allows unlimited use or access to a service, such as public transport or an event, for the entire day.

Marginal Benefit

The additional satisfaction or utility gained from consuming or producing one extra unit of a good or service.