The Typical Family on the Planet Econ Consumes 10 Pizzas

question 132

Multiple Choice

The typical family on the Planet Econ consumes 10 pizzas, 7 pairs of jeans, and 20 gallons of milk. In 2004, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon. In 2005, the price of pizzas increased to $14 each, while the price of jeans and milk remained the same. Between 2004 and 2005, a typical family's cost of living:

• A) increased by 9 percent.
• B) decreased by 9 percent.
• C) remained the same.
• D) increased by 40 percent.

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Definitions:

Consolidated Equity

The total amount of owners' or shareholders' equity in a conglomerate, after all inter-company balances and transactions have been eliminated in consolidation.

Financial Statements

Official records that detail the financial activities and condition of a business, organization, or individual, typically including balance sheet, income statement, and statement of cash flows.

Retained Earnings

The portion of a company's profits kept in the business after dividends are paid to shareholders, used for reinvestment or to pay off debt.