Question : 31) In 2013, the reference base period for the CPI : 1238517

31) In 2013, the reference base period for the CPI for the nation of Webot, a typical consumer spent $30 on potatoes and $150 on steak. If the price of steak is $15 and the price of potatoes is $1 then there are ________ units of steak and ________ units of potatoes in the CPI market basket.

A) 30; 150

B) 10; 30

C) 150; 30

D) 5; 30

E) None of the above answers is correct.

32) Consumers in Beachland consume only two goods, sodas and DVDs. If they spend $10 on sodas and $90 on DVDs a month, how many sodas and DVDs are in their CPI market basket if the price of a soda is $1 and the price of a DVD is $9?

A) 9 sodas and 1 DVD

B) 1 soda and 9 DVDs

C) 10 sodas and 9 DVDs

D) 10 sodas and 10 DVDs

E) It is impossible to determine the market basket without information on the quantity of at least one of the two goods consumed.

33) When the price of, say, a package of rice changes, what must the BLS do next?

A) immediately incorporate the new price into the CPI

B) determine if the new price is consistent with other price changes for the period

C) determine if the size, quality, weight, or packing of the rice has changed and adjust the price accordingly

D) ignore the price change

E) immediately incorporate the new price into the CPI only if the price has fallen

34) The formula for the CPI is

A) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at next year’s prices) × 100.

B) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices) × 100.

C) (Cost of CPI market basket at base period prices ÷ Cost of CPI market basket at current period prices) × 100.

D) (Cost of CPI market basket this year × Cost of CPI market basket at base period prices) ÷ 100.

E) (Cost of CPI market basket this year × Cost of CPI market basket at base period prices) × 100.

35) The formula for the CPI is

A) (Cost of CPI market basket at base period prices ÷ Cost of CPI market basket at current period prices) × 100.

B) (Cost of CPI market basket at current period prices – Cost of CPI market basket at base period prices) × 100.

C) (Cost of CPI market basket at base period prices – Cost of CPI market basket at current period prices) × 100.

D) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices) × 100.

E) (Cost of CPI market basket at current period prices + Cost of CPI market basket at base period prices) × 100.

36) Each month the CPI is calculated by

A) recording the new prices and making no other calculation.

B) multiplying the current cost of the CPI market basket by the base period cost and then dividing by 100.

C) subtracting the base period cost of the CPI market basket from the current cost and then dividing by 100.

D) dividing the current cost of the CPI market basket by the base period cost and then multiplying by 100.

E) subtracting the current period cost of the CPI market basket from the base period cost and then multiplying by 100.

37) The table above gives the CPI for a nation. Based on the table, we can determine that the reference base period is

A) 1994.

B) 1996.

C) 1998-2000.

D) 2002.

E) More information about when the Consumer Expenditure Survey was undertaken is needed to answer the question.

38) If the cost of the CPI market basket at current period prices is $1000 and the cost of the CPI market basket at base period prices is $250, the CPI is

A) 4.0.

B) 400.

C) 250.

D) 100.

E) 2.50.

39) To find the cost of the CPI market basket in the base period prices we have to multiply the

A) quantities in the CPI market basket by the base period prices.

B) quantities in the CPI market basket by the current period prices.

C) current period quantities in the CPI market basket by the base period prices.

D) current period quantities in the CPI market basket by the current period prices.

E) quantities in the CPI market basket by the base period prices and then multiply by 100.

40) To find the cost of the CPI market basket in the current period we have to multiply the

A) quantities in the CPI market basket by the base period prices.

B) quantities in the CPI market basket by the current period prices.

C) current period quantities in the CPI market basket by the base period prices.

D) current period quantities in the CPI market basket by the current period prices.

E) quantities in the CPI market basket by the base period prices and then multiply by 100.