5. a) The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is theamount spent each year on the "basket" of frult with the quantities shown in column 2?2003ItemsQty. 200120022004AmountAmountAmounPriceAmountPricePricePricet SpentSpentSpentSpent$0.75$0.25$0.70$0.85$0.25$0.90$0.88$0.29$0.95Apples10$0.50$0.20$0.5$2.00122.GrapesRaspberries 1TotalPrice IndexInflation2.052.13Rateb) Construct the price index for a "fruit basket" in each year using 2003 as the base year.c) Compute the inflation rate for fruit prices from 2001 to 2004.

Meaning of Inflation: The term inflation refers to the situation under which there is an excessive…

5. a) The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the "basket" of fruit with the quantities shown in column 2? Items Qty. 2001 2002 2003 2004 Amount Amount Amoun Amount Price Price Price Price Spent Spent t Spent Spent $0.50 $0.20 $0.65 $0.85 $0.25 $0.90 $0.88 $0.29 $0.95 Apples 10 $0.75 $0.25 $0.70 Bananas 12 Grapes Raspberries Total 1 $2.00 1.9 2.05 2.13 Price Index Inflation Rate b) Construct the price index for a "fruit basket" in each year using 2003 as the base year. c) Compute the inflation rate for fruit prices from 2001 to 2004.

5. a) The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the "basket" of fruit with the quantities shown in column 2? Items Qty. 2001 2002 2003 2004 Amount Amount Amoun Amount Price Price Price Price Spent Spent t Spent Spent $0.50 $0.20 $0.65 $0.85 $0.25 $0.90 $0.88 $0.29 $0.95 Apples 10 $0.75 $0.25 $0.70 Bananas 12 Grapes Raspberries Total 1 $2.00 1.9 2.05 2.13 Price Index Inflation Rate b) Construct the price index for a "fruit basket" in each year using 2003 as the base year. c) Compute the inflation rate for fruit prices from 2001 to 2004.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

5. a) The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the
amount spent each year on the "basket" of frult with the quantities shown in column 2?
2003
Items
Qty. 2001
2002
2004
Amount
Amount
Amoun
Price
Amount
Price
Price
Price
t Spent
Spent
Spent
Spent
$0.75
$0.25
$0.70
$0.85
$0.25
$0.90
$0.88
$0.29
$0.95
Apples
10
$0.50
$0.20
$0.5
$2.00
12
2.
Grapes
Raspberries 1
Total
Price Index
Inflation
2.05
2.13
Rate
b) Construct the price index for a "fruit basket" in each year using 2003 as the base year.
c) Compute the inflation rate for fruit prices from 2001 to 2004.

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