Refer to the Information Provided in Table 7

question 19

Multiple Choice

Refer to the information provided in Table 7.5 below to answer the questions that follow.
Table 7.5
-Refer to Table 7.5 If 2015 is the base year, the price index in 2016 is

• A) 86.1.
• B) 93.6.
• C) 106.4.
• D) 116.1.

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Definitions:

Market Failure

A situation where the allocation of goods and services is not efficient, often leading to a net social welfare loss.

Goods

Physical items produced for sale or use, characterized by their tangibility and their capacity to satisfy human wants or needs.

Free-rider Problem

A situation in which some individuals consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production, without contributing to its provision.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.