Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 24 - Part VIII - Measuring the Cost of Living - Questions for Review - Page 519: 1

Answer

A 10% increase in the price of chicken.

Work Step by Step

Price increases in chicken would have a greater effect on CPI because this measure of the overall price level relies on the fixed basket of goods for a typical household. The average household is more likely to consume chicken than caviar, which is likely excluded from the basket in the measure of CPI.
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