3. Suppose that people consume only three goods, as shown in this table: 2014 price 2014 quantity 2015 price 2015 quantity Tennis Balls Golf Balls $4 100 $6 100 $2 100 $2 100 Bottles of Gatorade $1 200 $2 200 a. What is the percentage change in the price of each of the three goods? b. Using a method similar to the consumer price index, compute the percentage change in the overall price level. c. If you were to learn that a bottle of Gatorade increased in size from 2014 to 2015, should that information affect your calculation of the inflation rate? If so, how?

3. Suppose that people consume only three goods, as shown in this table: 2014 price 2014 quantity 2015 price 2015 quantity Tennis Balls Golf Balls $4 100 $6 100 $2 100 $2 100 Bottles of Gatorade $1 200 $2 200 a. What is the percentage change in the price of each of the three goods? b. Using a method similar to the consumer price index, compute the percentage change in the overall price level. c. If you were to learn that a bottle of Gatorade increased in size from 2014 to 2015, should that information affect your calculation of the inflation rate? If so, how?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please answer
4. What's wrong with this way of thinking? "Economists argue that lower prices will result in fewer units being supplied. However, there are exceptions to this rule. For example, in 1972, a very simple 10-digit electronic calculator sold for $120. By 2000, the price of the same type of calculator had declined to less than $5. Yet business firms produced and sold many more calculators in 2000 than they did in 1972. Lower prices did not result in less production or in a decline in the number of calculators supplied." 99
In the diagram below, a doubling of the price of X causes one to Y 100 20 40 45 50 100 increase the consumption of X from 20 to 45 b. increase the consumption of X from 20 to 40 c. decrease the consumption of X from 50 to 20 d. decrease the consumption of X from 45 to 40 none of the above a. е.
please urgent EXERCISE 2 Ravi has £21 to spend on pastries and biscuits. If he spends all the money on pastries, he can afford 15 pastries. The slope of Ravi’s budget line (assuming his pastries consumption is measured on the horizontal axis and his biscuits consumption is measured on the vertical axis) is -3.5 (3.5 in absolute terms). a) Calculate the price of a pastry and the price of a biscuit. Write down Ravi’s budget equation and draw the corresponding budget line. Mark the consumption bundle mentioned above. In your graph, clearly label the axes, the budget line, and calculate the coordinates of the points of intersection of the budget line with each axis. Interpret each of those points. b) Discuss how Ravi’s budget set would change if his budget doubles. Show the relevant changes graphically. How could the price of a pastry increase so that Ravi could still afford to buy 15 pastries? c) Discuss how Ravi’s budget constraint would change if the government imposed a tax of £0.50…
ЕОC 5.07 If the price of barley (an input into beer production) falls and at the same time the price of wine rises (a substitute in consumption to beer) we would expect beer prices to and the amount of beer sold to Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a fall; fall b fall; fall or rise rise; fall fall or rise; rise
Can an increase in the price of cheese possibly inducea consumer to buy more cheese? Explain.
Help me answer this macroeconomics theory question
Paul consumes cheese and wine and his income is $200. Is it possible that when the price of one pound of cheese is $5 and the price of wine per glass is $5, Paul consumes 10 glasses of wine and 30 pounds of cheese per week, but when the price of one pound of cheese is $2 and the price of wine per glass is $10, Paul does not consume any cheese and spends all of his income on wine?
If computers are like most goods and the price of computers chips rise, then holding all else constant, the Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the price and quantity of computers will decrease b the price and quantity of computers will increase the price of computers will increases and quantity of computers will decrease d the price of computers will decrease and quantity of computers will increase
One Analyze the effect of each scenario on the price of khaki pants. Consider the following scenarios. Think about how each scenario would affect the price of khaki pants. A new technology reduces the time it takes to make a pair of khaki pants. The price of the cloth used to make khaki pants falls. The wage rate paid to garment workers increases. The price of jeans increases. People's incomes increase.
EOC 5.04 Which of the below would likely cause the equilibrium price of pencils to rise and the equilibrium quantity of pencils to fall? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The price of erasers rises (a complement in consumption). b The price of pens rise (a substitute in consumption). The price of lead rises (an input into pencils). d Consumers' income rises (assuming pens are a normal good).