In 1972,one Could Buy a Bag of Chips,a Pound of Hamburger,a

question 113

Multiple Choice

In 1972,one could buy a bag of chips,a pound of hamburger,a package of buns,and a small bag of charcoal for about $2.50.If the same goods today cost $6.00,then which pair of CPIs would make the cost in today's dollars the same for both years?

• A)60 in 1972 and 150 today
• B)65 in 1972 and 156 today
• C)75 in 1972 and 160 today
• D)90 in 1972 and 145.8 today

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Definitions:

Marginal Cost

The growth in aggregate costs resulting from the manufacture of an additional product or service unit.

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the costs of the goods or services involved.

Efficient Level

The efficient level refers to the optimal point of production or service provision where the cost of resources is minimized and the satisfaction or benefit to consumers is maximized.

Impose a Tax

The act of a government or authority setting a financial charge or levy upon a taxpayer.