A Country Reports the Total Expenditures on the Fixed CPI

question 127

Multiple Choice

A country reports the total expenditures on the fixed CPI basket for the past three years.The cost of the CPI basket in 2010 was $23,000,the cost of the CPI basket for the reference base period,2011,was $23,805,and the cost of the CPI basket in 2012 was $24,500.The CPI for 2010 is

• A)96.6.
• B)100.0.
• C)103.5.
• D)106.5.
• E)23.0.

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Definitions:

Marginal Cost

The additional expense associated with creating another unit of a product or service.

Total Cost

The aggregate expenditure related to the manufacturing of products or services, which includes both stable and changeable costs.

Variable Inputs

Inputs in production that change in quantity depending on the level of output, such as raw materials and labor.

Marginal Cost

The expense associated with manufacturing an extra unit of a product or service.