Question 1

0.5pts

The table below details the individual Consumer Price Indices (CPI) for individual expenditure categories for 2016 and 2017:

CPI Category

2016

2017

Price Change

Gasoline

195.915

216.781

Apparel

122.637

120.614

College textbooks

346.15

342.34235

What was the price change between 2016 and 2017 in the gasoline expenditure category?

Group of answer choices

10.65%

216.781%

110.65%

195.915%

Flag question: Question 2

Question 2

0.5pts

Read the following excerpt from a U.S. Energy Information Administration Report that was published on January 9, 2018:

Crude Oil Prices. Brent crude oil averaged $54/barrel (b) in 2017, an increase of $10/b from 2016 levels. Prices increased fairly steadily through the second half of the year, with year-end prices higher than the annual average. Daily Brent spot prices ended 2017 near $67/b, which was the highest level since December 2014. The monthly average spot price of Brent crude oil increased by $2/b in December to $64/b, marking only the fourth time that monthly Brent crude oil prices averaged more than $60/b in the past 36 months

Most of the upward price movement in recent months reflects continuing draws in global oil inventory levels. EIA estimates that global petroleum and other liquid fuels inventories fell by an average of 0.4 million b/d in 2017, which was the first year of annual average draws since 2013. In addition, oil prices were supported by OPEC's November 30, 2017, announcement to extend its crude oil supply reduction agreement through the end of 2018. Also, Brent prices increased in December because of a disruption to the North Sea's Forties crude oil pipeline system early in the month. The Forties pipeline system is one of the primary distribution networks for Brent crude oil delivery in the North Sea, and its outage curtailed available supply in the near term. Trade press reports indicate the Forties pipeline system restarted operations in late December 2017.

Questions:

Based on the excerpt, was the increase in the gasoline expenditure category CPI due to a change in supply or demand in the market?

Group of answer choices

Demand, because there were several factors affecting the market that were caused by producers of crude oil.In particular, inventory levels increased, OPEC extended production increases, and there was a disruption in a major pipeline system.

Supply, because there were several factors affecting the market that were caused by producers of crude oil.In particular, inventory levels declined, OPEC extended production reductions, and there was a disruption in a major pipeline system.

Supply because price increases are generally due to production decisions. In addition, supply creates its own demand, thus the supply side of the market will determine equilibrium prices.

Deman because as prices rose we saw a reduction in the quantity demanded in the market. This led to the reduction in crude oil inventory levels and the production disruptions.

Flag question: Question 3

Question 3

0.5pts

CPI Category

2016

2017

Price Change

Gasoline

195.915

216.781

Apparel

122.637

120.614

College textbooks

346.15

342.34235

What was the price change between 2016 and 2017 in the apparel expenditure category?

Group of answer choices

1.65%

-1.65%

-10.65%

3.65%

Flag question: Question 4

Question 4

0.5pts

Read the following excerpt from a Forbes article that was published on November 3, 2017:

Now department stores' frantic plunge into the off-price sectoris in danger of killing off the full-price apparel business for good, experts warn.

In addition to discounting merchandise in their full-line stores, marked-down goods are increasingly feeding the pipeline in department stores' ever burgeoning off-price channel, from the already heavily promotional Macy's expanding itsBackstage(Links to an external site.)

spin-off concept to Nordstrom's Rack format."The off-price business is driving growth and getting bigger than the full-price channel," saidSusan Lee(Links to an external site.)

, a partner with consultancy Simon-Kucher.

Today, Nordstrom operates 216 Nordstrom Rack off-price stores, nearly double the number of its 122 full-line stores, just as Saks Fifth Avenue's 39-store full-line chain is a fraction of its 118-store Off 5th outlet fleet.

The Amazon Factor

Amazon isn't doing the full-price apparel business any favors either. While fashion brands are by no means flocking to the site, still fearful of losing control of their brand image, the discount-aggressive e-tailer is gunning for apparel, and has scored some big symbolic wins, such as itspartnership with Nike(Links to an external site.)

.

Lord & Taylor department stores, for one, recently startedpricing matching Amazon(Links to an external site.)

. (Not to mention partnering with Wal-Mart in an online mall venture.)

Questions:

Based on the excerpt, was the decrease in the apparel expenditure category CPI due to a change in supply or demand in the market?

Group of answer choices

Supply. This is due to increased competition among suppliers in the apparel market, which reduced prices.

Demand. This is due to decreased competition among suppliers in the apparel market, which reduced prices.

Supply. This is due to a reduction in overall competition in the low priced apparel market.

Demand because consumers tastes and preferences shifted to higher priced apparel items.

Flag question: Question 5

Question 5

0.5pts

CPI Category

2016

2017

Price Change

Gasoline

195.915

216.781

Apparel

122.637

120.614

College textbooks

346.15

342.34235

What was the price change between 2016 and 2017 in the college textbooks expenditure category?

Group of answer choices

-1.1%

5.35%

-10.25%

1.1%

Flag question: Question 6

Question 6

0.5pts

Read the following excerpt from an article in the Atlantic that was published on July 26, 2017:

The United States is running out of teenagers.

For two decades, college enrollment grew and grew, bolstered by the coming-of-age of the enormous Millennial generation. But today, the number of young people going to college is in decline. It's not that today's teenagers hate higher education; theshareof recent high school graduates going on to college has barely budged. Instead, there are simplyfewer recent(Links to an external site.)

high school grads(Links to an external site.)

overall, due to declining birth rates.More than half(Links to an external site.)

of colleges and universities say their number of students has declined.

Questions:

Based on the excerpt, was the decrease in the college textbooks expenditure category CPI due to a change in supply or demand in the market?

Group of answer choices

Demand. This is because of an increase in the number of new entrants into college.

Supply.This is because the price of materials that go into textbook production has decreased.

Demand. This is due to the fact that demand has declined for college textbooks because of a decline in recent high school graduates and declining birth rates.

Supply. This is due to the fact that demand has declined for college textbooks because of a decline in recent high school graduates and declining birth rates.