In an Imaginary Economy,consumers Buy Only Razors and Cologne

question 32

Multiple Choice

In an imaginary economy,consumers buy only razors and cologne.The fixed basket consists of 6 razors and 4 bottles of cologne.A razor cost $20 in 2009 and $25 in 2010.A bottle of cologne cost $30 in 2009 and $40 in 2010.Using 2009 as the base year,which of the following statements is correct?

• A)For the typical consumer,the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years.
• B)The consumer price index is 310 in 2010.
• C)The rate of inflation is 29.17% in 2010.
• D)None of the above is correct.

---

Definitions:

Alcohol Abuse

The excessive and harmful consumption of alcohol, leading to negative health and social consequences.

Tiny Blood Vessels

Refers to the small vessels such as capillaries that facilitate the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and the tissues.

Splinter Hemorrhages

Tiny blood clots that run vertically under the nails, often indicative of an infection or other medical condition.

Olfactory Nerve

The first cranial nerve responsible for the sense of smell, transmitting sensory information from the nose to the brain.