Exam%201_20_C%20W%20ANS

Exam%201_20_C%20W%20ANS -...

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+,-$"-./01 #2 34",#0"#$#5-"1 +,#26 7,4"0 8 Q 1. Suppose that the market basket for the University Student Price Index (USPI) consists of 5 textbooks and 100 gallons of gasoline. In 2007, which is the base year for this index, textbooks cost $50 each and gas costs $1.00 per gallon. Suppose that in 2008, textbooks cost $80 each and gasoline costs $3.00 per gallon. Then, the USPI for 2008 is_____. USPI 2008 = 100 x Cost of Basket 2008 / Cost of Basket Base = 100 x (5 x 80 + 100 x 3)/ (5 x 50 + 100 x 1) = 200 A) 100. B) 150. C) 200. D) 250. 2. Baker can make scrumptious pastry and Tailor can make fashionable clothes. Baker hates to make clothes. Tailor cannot bake. Baker makes more pastries than he can eat, then exchange to clothes from Tailor. Baker and Tailor both can eat well and dress well. This statement best represents the economic concept of_____. A) the real cost of something is what you must give up to get it. B) “how much?” is a decision at the margin. C) people usually exploit opportunities to make themselves better off. D) there are gains from trade. 3. In 1939, Gone with the wind box office was $1.25 billion. In 2010, Avatar box office records $5.15 billion. The table below presents some information about the CPI. Year CPI 1939 30 2010 180 According to the CPI, after correcting inflation what would be the Gone with the wind box office in 2010 dollar term? 1.25 x 180/30 = 7.50 A) $1.25 billion B) $6.25 billion C) $7.50 billion
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+,-$"-./01 #2 34",#0"#$#5-"1 +,#26 7,4"0 8 G D) $8.15 billion Use the following to answer question 4. Table: The Consumer Price Index 4. (Table: The Consumer Price Index) The approximate rate of inflation from Year 4 to Year 5 is _____ percent. Inflation from year 4 to 5 = 100 x (150-125) / 125 = 20% A) 5 B) 10 C) 19 D) 20 5. Two kids got together to celebrate a birthday. If the birthday cake is cut into 4 pieces of the same size and one slice is given to one kid and 3 pieces is given to the other kid, then this cake distribution is_____. A) efficient but not equitable.
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Exam%201_20_C%20W%20ANS -...

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