Answer key to sample problems for test 1

Here is the answer key. Let me know if you think any are incorrect. (You should email me or text me if you see me online (AIM) later. I'm not so likely to check any comments. I apologize for some of the repeated questions. These problems come from previous tests. Sometimes I reuse questions (ooo!). But anyway, this is intended to just be a helpful guide as to what kind of questions can be asked. You should also make use of the sample quizzes available from the textbook's website. (Information is on the syllabus.)

1-A, 2-C, 3-D, 4-C, 5-A, 6-B, 7-C,
8-B, 9-A, 10-D, 11-A, 12-B, 13-A, 14-A, 15-C,
16-B, 17-B, 18-A, 19-B, 20-C, 21-B, 22-A, 23-D,
24-B, 25-A, 26-D, 27-A, 28-A, 29-B, 30-D,
31-A, 32-B, 33-B, 34-B, 35-C, 36-C, 37-C,
38-C, 39-D, 40-B, 41-B, 42-B, 43-B,
44-C, 45-D, 46-D.

Good luck.


P.S. Just so we are all clear on 36 and 37.

To calculate the price index for a year, given a base year, you need to take the cost of the market basket divided by the base year cost.

so for 2005, the price index is ($160/$130) x 100

Then to answer problem 37, you need to find the price index for 2004 ($140/$130) x 100. After finding these two price index, find the percentage change between the two years (with the difference between the two in the numerator and the year 2004 value as the "reference year" in the denominator).