Calculate the rate of inflation or delation between 2014 and 2015. 1. The following table shows the quantity of popcorn, Coke, and movie tickets a typicalconsumer buys. It also shows the prices for those goods in 2014 and 2015. Assume that 2015 is the base year.GoodQuantityPrice inPrice in20142015Рорсorn4$4$5Coke$6$8Movie5$2$3Ticket

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Calculate the rate of inflation or delation between 2014 and 2015.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 1SCQ: Table 22.4 shows the fruit prices that the typing college student purchased from 2001 to 2004. What...

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Question

Calculate the rate of inflation or delation between 2014 and 2015.

1. The following table shows the quantity of popcorn, Coke, and movie tickets a typical
consumer buys. It also shows the prices for those goods in 2014 and 2015. Assume that 2015 is the base year.
Good
Quantity
Price in
Price in
2014
2015
Рорсorn
4
$4
$5
Coke
$6
$8
Movie
5
$2
$3
Ticket

Expert Solution

Step 1.

Cost of basket, 2014 = 4 x 4 + 6 x 3 + 2 x 5 = 16 + 18 + 10 = 44

Cost of basket, 2015 = 5 x 4 + 8 x 3 + 3 x 5 = 20 + 24 + 15 = 59

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Table 22.4 shows the fruit prices that the typing college student purchased from 2001 to 2004. What is the amount spent each year on the basket of fruit with the quantities shown in column 2?