31. Suppose that the typical consumer has a salary of $15,000 in 2017. His salary grows by 30% per year. Will he be able to afford the consumption basket in 2021 if he only uses his annual salary to consume? (A) Yes, and he will have money left over. (B) Yes, he will be barely able to afford it. (C) No, he will not be able to afford it. (D) It is more important to be Chad than it is to be correct.
31. Suppose that the typical consumer has a salary of $15,000 in 2017. His salary grows by 30% per year. Will he be able to afford the consumption basket in 2021 if he only uses his annual salary to consume? (A) Yes, and he will have money left over. (B) Yes, he will be barely able to afford it. (C) No, he will not be able to afford it. (D) It is more important to be Chad than it is to be correct.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Need help with
Transcribed Image Text:31. Suppose that the typical consumer has a salary of $15,000 in 2017. His salary grows
by 30% per year. Will he be able to afford the consumption basket in 2021 if he only
uses his annual salary to consume?
(A) Yes, and he will have money left over.
(B) Yes, he will be barely able to afford it.
(C) No, he will not be able to afford it.
(D) It is more important to be Chad than it is to be correct.
Transcribed Image Text:The next four questions involve the following situation: Consider an economy
with only three consumption goods: Hasbulla NFTS, laddu, and Akshay Kumar films.1
The following table shows prices for 2018-2021. Use 2018 as the base year for any relevant
calculations. Based on a 2018 survey, the typical consumer has an annual consumption
of 3 NFTS, 600 lbs of laadu, and 25 movies.
Year Price of NFT Price of laddu (lb)
Price of a Movie
2018
$10
$1
$10
2019
$150
$1
$10
$1,010
$20,000
2020
$2
$10
2021
$3
$15
28. What is the CPI for 2019?
(A) 509.
(В) 100.
(C) 148.
(D) 7065.
29. What is the CPI for 2020?
(A) 509.
(B) 100.
(С) 148.
(D) 7065.
30. Based on these data and their associated Consumer Price Indices, what is the
inflation rate from 2018 to 2020?
(A) 6,695%.
(B) 409%.
(C) 100%.
(D) 10,000%.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education