Suppose That 1982 Is the Base Year for the Consumer

question 150

Multiple Choice

Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 270.What does this "270" mean?

• A) What cost $100 in 1982 on average cost 270 times as much in 2019.
• B) What cost $100 in 1982 on average cost $270 in 2019.
• C) What cost $100 in 1982 on average cost 0.27 times as much in 2019.
• D) What cost $100 in 1982 on average cost $27 more in 2019

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Definitions:

Net Operating Income

The income derived from a firm's core business operations, not including taxes and interest expenses.

Contribution Margin Ratio

A ratio that measures the percentage of sales revenue remaining after deducting variable costs, indicating the portion of sales available to cover fixed costs and generate profit.

Variable Expense Ratio

A ratio computed by dividing variable expenses by sales.

Break-even Analysis

A calculation to determine the sales volume at which total revenues equal total costs, indicating no profit or loss.