Question : 41) When the cost of the CPI market basket increases : 1238518

41) When the cost of the CPI market basket increases from one year to the next, we know that

A) on the average, current prices are less than past year prices.

B) the quantities of the goods and services contained in the CPI market basket have increased on the average.

C) the prices of the goods and services contained in the CPI market basket have increased on the average.

D) on the average, current prices are below base year prices.

E) either the quantities of the goods and services contained in the CPI market basket have increased on the average and/or the prices of the goods and services contained in the CPI market basket have increased on the average.

42) If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year, we know that

A) the inflation rate is falling.

B) the next year’s CPI will be above 100.

C) the next year’s CPI will be below 100.

D) the cost of the CPI market basket at next year’s prices is lower than the cost of the CPI market basket at base period prices.

E) the market basket used by the BLS must be changed next year to reflect consumers’ new expenditures.

43) If the cost of the CPI market basket at current period prices is $275 and the cost of the CPI market basket at base period prices is $350, the CPI is

A) 79.

B) 100.

C) 127.

D) 350.

E) 275.

44) Suppose the CPI for this year is 133.7. This number means that

A) on average, goods cost $133.70 each this year.

B) prices rose 33.7 percent over the last year.

C) prices rose 133.7 percent over the base year.

D) prices rose 33.7 percent over the base year.

E) prices rose 133.7 percent over the last year.

45) Suppose that the cost of the CPI basket of goods and services rises from $137 in 2010, which is the base year, to $159 in 2011. The CPI in 2011 is ________ and the inflation rate from 2010 to 2011 is ________.    

A) 86; 14 percent

B) 86; 22 percent

C) 116; 22 percent

D) 116; 16 percent

E) There is not enough information to answer this question.

46) Suppose that last year, the price of strawberries was $2 and the price of milk was $1. This year, the price of milk is $2 and the price of strawberries is $1. Which of the following statements is true?

A) The CPI does not change because the change in the two prices is the same.

B) The CPI increases because milk is more expensive.

C) The CPI decreases because strawberries are cheaper.

D) The CPI might increase or decrease depending on the quantities in the CPI market basket.

E) The change in the CPI depends how the market basket changed between the two years.

47) Suppose that the CPI basket contains only 40 heads of cauliflower and 60 bunches of broccoli. If the price of cauliflower goes down by $1 per head and the price of broccoli goes up by $1 per bunch, then  

A) the CPI does not change.

B) the CPI increases.

C) the CPI decreases.

D) the CPI might increase or decrease depending how the quantities are affected by the price changes.

E) There is not enough information to answer this question.

48) In a small, agricultural nation, consumers buy only steak and potatoes. In 2009, the base year, the typical consumer spent $potatoes on strawberries and $100 on steak. The price of potatoes is $1 and the price of steak is $2 in 2009. In 2009, the price of potatoes is $2 and the price of steak is $1. The CPI for 2010 is

A) 80.

B) 125.

C) 100.

D) 110.

E) 25 percent.

49) The data in the table above shows the consumption by families in a small (poor) economy. The families consume only salt and bread. The reference base period is 2011. The cost of the CPI market basket in 2011 is

A) $64.00.

B) $3.50.

C) $52.00.

D) $5.00.

E) 100.

50) The data in the table above shows the consumption by families in a small (poor) economy. The families consume only salt and bread. The reference base period is 2011. The cost of the CPI market basket in 2010 is

A) $5.00.

B) $64.00.

C) $8.50.

D) $52.00.

E) unable to be calculated because information is needed about the quantities purchased in 2010.