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.

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Definitions:

Estimating Probabilities

The process of determining the likelihood of a given outcome or event occurring.

Emotions

Complex psychological states that involve three distinct components: a subjective experience, a physiological response, and a behavioral or expressive response.

Statistical Effectiveness

Describes the extent to which a particular intervention or treatment has been proven to work, based on statistical analysis.

Transmission

The act or process of transferring something from one place, person, or thing to another, often used in the context of diseases or information.