Twenty Years Ago, Dmitri Consumed Bread Which Cost Him 10

question 13

Multiple Choice

Twenty years ago, Dmitri consumed bread which cost him 10 kopeks a loaf and potatoes which cost him 18 kopeks a sack.With his income of 230 kopeks, he bought 5 loaves of bread and 10 sacks of potatoes.Today he has an income of 400 kopeks.Bread now costs him 20 kopeks a loaf and potatoes cost him 25 kopeks a sack.Assuming his preferences haven't changed (and the sizes of loaves and sacks haven't changed) , when was he better off?

• A)He was equally well off in the two periods.
• B)He is better off today.
• C)He was better off 20 years ago.
• D)From the information given here, we are unable to tell.
• E)None of the above.

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Definitions:

Capital Accounts

Accounts that represent the initial and subsequent investments of owners in a business, adjusted for any profits or losses.

Profit Sharing

A company policy of distributing a portion of net profits to its employees as a form of bonus or additional compensation.

Net Assets

This represents the difference between a company's total assets and total liabilities, indicating the owner's equity.

Net Income

The net income of a company calculated by deducting all costs, taxes, and expenses from its total revenue.