Assume an Economy That Is Producing Only One Product Refer to the Data

question 160

Multiple Choice

Assume an economy that is producing only one product.Output and price data for a three-year period are as follows.Answer the question on the basis of these data. $\begin{array}{c}\begin{array}{c}\\\underline{\text { Year }} \\1 \\2 \\3\end{array}\begin{array}{c}\text { Units of}\\\underline{\text {Output}}\\20\\25\\30\end{array}\begin{array}{c}\text {Price Per}\\\underline{\text {Unit}}\\ \$ 4 \\4\\6 \end{array}\end{array}$
Refer to the data.If year 2 is chosen as the base year,the price index for year 1 is:

• A) 80.
• B) 100.
• C) 120.
• D) 20.

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