Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs.
-Refer to Table 24-7. Which of the following scenarios is consistent with this statement? "The cost of living increased by 25 percent between 2009 and 2011."
A)The price of a hot dog was $2.24 rather than $3.00 in 2009, with other prices in the table remaining fixed.
B)The price of a hot dog was $4.07 rather than $3.63 in 2011, with other prices in the table remaining fixed..
C)The price of a hamburger was $4.24 rather than $5.00 in 2009, with other prices in the table remaining fixed.
D)The price of a hamburger was $5.96 rather than $5.61 in 2011, with other prices in the table remaining fixed.

Question

Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. 
-Refer to Table 24-7. Which of the following scenarios is consistent with this statement? "The cost of living increased by 25 percent between 2009 and 2011."
A)The price of a hot dog was $2.24 rather than $3.00 in 2009, with other prices in the table remaining fixed. 
B)The price of a hot dog was $4.07 rather than $3.63 in 2011, with other prices in the table remaining fixed.. 
C)The price of a hamburger was $4.24 rather than $5.00 in 2009, with other prices in the table remaining fixed. 
D)The price of a hamburger was $5.96 rather than $5.61 in 2011, with other prices in the table remaining fixed.

Quizplus · Accepted Answer

If the price of a hot dog increased to $4.07 in 2011 from $3.63, while other prices remained fixed, it would contribute to a 25% increase in the cost of living.