Consider a Small Economy in Which Consumers Buy Only Two

question 186

Multiple Choice

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

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

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Definitions:

Grave Mounds

Ancient burial sites characterized by large earthen or stone mounds covering graves, often associated with various cultures worldwide.

Enclosures

Physical structures or spaces that are designed to confine or protect what is inside them.

Elegy

A song or poem expressing sorrow, especially for one who is dead.

Sorrow

A deep feeling of sadness or grief that is often caused by loss, disappointment, or other emotional pain.