Consider a Small Economy in Which Consumers Buy Only Two

question 74

Multiple Choice

Consider a small economy in which consumers buy only two goods: apples and pears.In order to compute the consumer price index for this economy for two or more consecutive years,we assume that

• A)the number of apples bought by the typical consumer is equal to the number of pears bought by the typical consumer in each year.
• B)neither the number of apples nor the number of pears bought by the typical consumer changes from year to year.
• C)the percentage change in the price of apples is equal to the percentage change in the price of pears from year to year.
• D)neither the price of apples nor the price of pears changes from year to year.

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Definitions:

Experiment

A procedure carried out to support or refute a hypothesis, often involving the manipulation of variables to observe the effect on some behavior or condition.

Deliberately Exposing

Intentionally subjecting subjects (in an experiment) or oneself to certain conditions or stimuli to observe the effects.

Direct Observation

A method of collecting data by watching subjects in their natural (or controlled) environment without manipulating the situation.

Variable Of Interest

The specific quantity or quality that a study aims to measure or examine.