In the Following Table, We Present Prices for Three Commonly

question 110

Multiple Choice

In the following table, we present prices for three commonly used products—bread, fruits, and beverages—for the years 2008 through 2012.
$\begin{array}{|l|l|l|l|}\hline &\text { Bread } & \text { Fruits } & \text { Beverages } \\\hline \text { Year } & (\$ \text { per loaf) } & (\$ \text { per } \mathrm{kg}) & (\$ \text { per } \mathrm{L}) \\\hline 2008 & \$ 1.21 & \$ 2.18 & \$ 0.75 \\\hline 2009 & \$ 1.23 & \$ 2.35 & \$ 0.75 \\\hline 2010 & \$ 1.29 & \$ 2.41 & \$ 0.77 \\\hline 2011 & \$ 1.35 & \$ 2.54 & \$ 0.77 \\\hline 2012 & \$ 1.42 & \$ 2.87 & \$ 0.78 \\\hline\end{array}$
Consider a family with the following yearly consumption for these products for the years 2008 through 2012.
$$\begin{array} { | l | l | l | l | } \hline &\text { Bread } & \text { Fruits } & \text { Beverages } \\\hline \text { Year } &\text { (loaves) } & (\mathrm{kg}) & (\mathrm{L}) \\\hline \mathbf { 2 0 0 8 } & 2,200 & 250 & 2,400 \\\hline \mathbf { 2 0 0 9 } & 2,200 & 235 & 2,450 \\\hline \mathbf { 2 0 1 0 } & 2,200 & 210 & 2,580 \\\hline \mathbf { 2 0 1 1 } & 2,200 & 180 & 2,690 \\\hline \mathbf { 2 0 1 2 } & 2,200 & 140 & 2,810 \\\hline\end{array}$$
Answer the following questions using 2008 as the base year.
-Compute the aggregate price index for 2011.

• A)110.67
• B)116.67
• C)111.11
• D)112.56
• E)114.86

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Definitions:

Liability of Foreignness

The challenges and costs associated with operating in a market outside of a company's home country, including cultural differences and unfamiliar regulatory environments.

Import Tariffs

Taxes imposed by a government on goods and services imported into a country, used to control trade and protect domestic industries.

Global Demand

The total demand for a product or service across all countries and regions around the world.

Liability of Foreignness

This concept describes the challenges and additional costs that companies face when entering and operating in foreign markets, as opposed to their home countries.