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 number of pretzels bought by the typical consumer is equal to the number of cookies bought by the typical consumer in each year. b. neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year. c. the percentage change in the price of pretzels is equal to the percentage change in the price of cookies from year to year. d. neither the price of pretzels nor the price of cookies changes from year· to year.
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 number of pretzels bought by the typical consumer is equal to the number of cookies bought by the typical consumer in each year. b. neither the number of pretzels nor the number of cookies bought by the typical consumer changes from year to year. c. the percentage change in the price of pretzels is equal to the percentage change in the price of cookies from year to year. d. neither the price of pretzels nor the price of cookies changes from year· to year.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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 number of pretzels bought by the typical
consumer is equal to the number of cookies bought
by the typical consumer in each year.
b. neither the number of pretzels nor the number
of cookies bought by the typical consumer changes
from year to year.
c. the percentage change in the price of pretzels is
equal to the percentage change in the price of
cookies from year to year.
d. neither the price of pretzels nor the price of
cookies changes from year· to
year.
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