Author Question: Suppose that the CPI basket contains only 40 heads of cauliflower and 60 bunches of broccoli. If the ... (Read 72 times)

faduma · **on:** Jun 30, 2018

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 decreases.
B) the CPI does not change.
C) the CPI increases.
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.

Question 2

Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and a decrease in quantity demanded are represented by a movement from

A) point c to point a. B) point c to point d. C) point b to point c. D) point a to point d.