Table 5-2 2007 Price $40 Quantity fn Basket 2008 Price $50 3.80 $8.50 $3.5 ftem
ID: 1126964 • Letter: T
Question
Table 5-2 2007 Price $40 Quantity fn Basket 2008 Price $50 3.80 $8.50 $3.5 ftem extbooks asoline 2Za 20 gallons DVD rentals $3.50 49 Refer to Table above Supposethebase year is 2007. What is the value of the price index in 2007? b)100 c) 114 d) 342 e Cannot bedetermined with information given 01 D1 Quantity (b) Quantity Quantity 50. Thegraphs above show the market for Krispy Kreme donuts. sugar, holding everything else constant? Which graph best represents the impact of an increase in the price of d) D e None of theseExplanation / Answer
Q49
Answer
Option b
the price index of the base year is 100
because
Price index=(price of basket in current dollars/price of basket in base year dollars)*100
but the base and the current year is same for the base year
Q50
Answer
Option c
The increase in input prices shifts supply curve to right and that is depicted in graph c
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