An Index of Clothing Prices for 2006 Based on 1985

question 6

Multiple Choice

An index of clothing prices for 2006 based on 1985 is to be constructed. The prices for 1985 and 2006 and the quantity consumed in 1985 are shown below. Assuming that the number sold remained constant, i.e., the same number were sold in 2006 as in 1985, what is the weighted index of price for 2006 using 1985 as the base?

• A) 206.7
• B) 214.5
• C) 48.4
• D) 46.6

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Definitions:

Brand Names

Brand names are names given to a product or service by a company to differentiate it from competitors, signifying reputation and quality.

Less Developed Country

A country characterized by low levels of economic development, often measured by GDP per capita, industrialization, and standard of living.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power and product differentiation.

Oligopoly

A market setup where just a few companies dominate the market, resulting in minimal competition.