7. The consumer price index (CPI) is a fixed-weight index. It com- pares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. the price of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2008, 2009, and 2010. Convert the reSults into an index by dividing each bundle price figure by the bundle price in 2008. Caleulate the percentage change in your index between 2008 and 2009 and again between 2009 and 2010. Was there inflation between 2009 and 2010? Calculate

7. The consumer price index (CPI) is a fixed-weight index. It com- pares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. the price of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2008, 2009, and 2010. Convert the reSults into an index by dividing each bundle price figure by the bundle price in 2008. Caleulate the percentage change in your index between 2008 and 2009 and again between 2009 and 2010. Was there inflation between 2009 and 2010? Calculate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Blu-rays CPI basket quantity Bottled water 10 discs $16 per disc $12 per disc $1.00 per bottle $1.25 per bottle 14) If 2009 is the reference base period, what is the price index for the CPI basket of goods for 2015 in the above table? A) 102.8 2009 price 200 bottles 2015 price B) 97.3 C) zero because the price of Blu-rays fell and the price of water increased D) 128.0
One difference between the CPI and the GDP deflator is CPI uses a fixed basket, Deflator uses current production quantities CPI use current production quantities, Deflator uses a fixed basket of goods CPI measures price changes for consumer goods only, GDP deflator measures price changes for producer goods only CPI excludes imported goods while the deflator does not
The market basket used to calculate the CPI in Aquilonia is 4 loaves of bread, 6 gallons of milk, 2 shirts and 2 pants. In 2001 bread cost $1.00 per loaf, milk cost $1.50 per gallon, shirts cost $6.00 each and pants cost $10.00 per pair. In 2002 bread cost $1.50 per loaf, milk cost $2.00 per gallon, shirts cost $7.00 each and pants cost $12.00 per pair. What was the inflation rate, as measured by the CPI, for Aquilonia between 2001 and 2002? a. 24.4 percent b. 21.6 percent c. It is impossible to determine without knowing the base year. d. 30 percent
Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Quantity in Basket 10 1 300 75 8 Price Cost (Dollars) (Dollars) 3 30 75 75 600 150 720 NN 90 Suppose the base year for this price index is 2017. Between 2017 and 2018, the CSPI increased by 2017 1,575 100 Price (Dollars) 3 80 2 4 110 2018 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Price (Dollars) 4 104 2 5 120 % Between 2018 and 2019, the CSPI increased by 2019 Cost (Dollars) % Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply. A new type of personal transporter, which made it easier to get around places like university campuses, became available for purchase. Professors required each student to buy 10 notebooks, regardless of the price. As the price of energy drinks increased relative to the price of coffee between 2017…
Indicate which one of the following events will affect CPI ONLY. Oa Saudi Arabia successfully developing a vaccine for Covid-19 which is used locally as well as exported to other countries. Ob. There is a decrease in the price of meat imported from Australia. Oc.There is an increase in the price of eggs produced in Saudi Arabia Od. People buying more imported goods without any change in prices O Saudi Arabia changes its base year to 2020
The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and prices for the base year (Year 1) and in the following year. Base Year (Year 1) Quantity Price in the Base Year Price in Product Year 2 Pizza 20 $2.50 $3.13 T-Shirts 4 $20.00 $18.00 Rent 1 $350.00 $385.00 In Year 1, the CPI for the economy is | In Year 2, the CPI for this economy is (Round both answers to one decimal place.)
Table 25-4 Adam's expenditures on food for three consecutive years, along with other values, are presented in the following table. Expenditures on food Consumer price index 1 $9,623. $8,604. $157.9. $9,101. Year 2 3 $9,000 $9,200 $10,200 130 139 x Refer to Table 25-4. Suppose the consumer price index is 7.5 percent higher in Year 3 than in Year 1. Then Adam's food expenditures for Year 2 in Year 3 dollars amount to
Suppose that typical CPI basket for consumers contains 3 goods: 5 wheels of cheese, 3 t-shirts, and 10 gallons of gasoline. The prices of the goods in 2019 and 2020 are listed below: Item Prices 2019 Prices 2020 Cheese $5 $10 T-shirt $10 $15 Gallon of Gasoline $3 $6 A) Find the cost of the CPI Basket in 2019: B) Find the cost of the CPI Basket in 2020: C) Using 2019 as the base reference period, calculate the CPI for 2020 D) What is the inflation rate in 2020? E) Suppose that you made $40,000 in 2019 and $41,000 in 2020. What has happened to your real income from 2019 to 2020?
Assume that people in an economy only consume the following goods shown in the table: Rice Meat Juice Year 1 price P2 P4 P1 Year 1 quantity 100 100 200 Year 2 price P2 P6 P2 Year 2 quantity 100 100 200 Calculate the % change in the price of every goods. Using the same method with the CPI, calculate the % change of the overall price level. If you were to learn that juice increased in size from Year 1 to Year 2, should that information affects your calculation of the inflation rate? If so, how? If you were to learn that juice introduced new flavors in Year 2, should that information affect your calculation of the inflation rate? If so, how?
The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and prices for the base year (Year 1) and in the following year Base Year (Year 1) Quantity 10 Price in the Base Year Price in Product Year 2 Pizza $3 13 $2.50 $15.00 $500.00 T-Shirts 2 $13.50 Rent 1 $550 00 In Year 1, the CPI for the economy is (Round both answers to one decimal place.) In Year 2, the CPI for this economy is
The following table shows a hypothetical situation for an economy that uses for an average household of four people a basket of only three products to calculate the consumer price index (CPI) between the years 2015 and 2018. Product Product A 20 Product B Product C 98 100 131 133 50 2015 4 Quantity Price $50 $52 $56 $100 55 $105 61 $113 $1,200 5 $1,210 5 $1,230 If the base year is 2015, what is the value of the consumer price index in 2015? (round to the closest integer) a 22 2016 P Q 23 2017 P Q $55 $111 $1,225 22 62 2018 5 P
Suppose that the British economy produces two goods: laptops and books. The quantity produced and the prices of these items for 2015 and 2016 are shown in the table below. Year 2015 2016 Quantities Produced Laptops 50 Books 1,000 Laptops 90 Books ? Price ($) Laptopa Books 7 Laptops 170 Books B 200 Instructions: In part a, round your answer to two decimal places. In part b, enter your answer as a whole number. In part c, round your answer to one decimal place. a. Let's assume that the base year was 2015, so that real GDP in 2015 equals nominal GDP in 2015. If the real GDP in Britain was $15,000 in 2015, the price of books was: $[ b. Using your answer from part (a), if the growth rate in nominal GDP was 15% | books must have been produced in 2016. Using your answers from parts (a) and (b), the growth rate in real GDP between 2015 and 2016 was: %