Question-01:The following table shows the average retail price of butter and theConsumer Price Index from 1980 to 2010, scaled so that the CPI 100 in1980.1980 19902000 2010CPI100158.56 208.98218.06Retail price of butter(salted, grade AA, per lb.) $1.88 $1.99 $2.52 $2.88Calculate the real price of butter in 1980 dollars. Has the realprice increased/decreased/ stayed the same from 1980 to 2000? Fromа.1980 to 2010?b.What is the percentage change in the real price (1980 dollars)from 1980 to 2000? From 1980 to 2010?с.Convert the CPI into 1990 ] 100 and determine the real price ofbutter in 1990 dollars.d.What is the percentage change in the real price (1990 dollars)from 1980 to 2000? Compare this with your answer in (b). What doyou notice? Explain.

"Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…

Answered: Question-01: The following table shows…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The consumers in the economy buys only two general types of products: Apples, and Bananas. Price and Quantity information of these items over a period are shown below: Year 2019 Year 2020 Product Quantity Average Price per Unit Quantity Average Price per Unit Apples 7 $5 9 $12 Bananas 18 $10 7 $16 Using year 2020 as the base year, the economy's consumer price index (CPI) in year 2019 is ______. (Your answer should include the first decimal point, if any.)
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Q10
Consider the simple economy that produces only three products. Use the information in the following table to calculate the (annual rate of inflation for 2020 as measured by the consumer price index (CPI). BASE YEAR (2010) 2019 2020 Price Price $10.00 2.00 Price $11.00 $16.20 240 2.45 15.00 15.00 14:00 Product Haircuts Hamburgers Movies Quantity 3 8 7 Using the information in the table, the CPI for 2019, with 2010 as the base year, is (Enter your response rounded to one decimal place)
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The information on price and quantity of three products consumed by a typical household in the year 2020 and 2021 is given by the table below 2020 2021 Price Quantity Quantity 10 Price $5.50 Fish 12 $5 $10 Beef 5 $11 4 Train Ride $8 20 $9 22 Using 2020 as the base year, measure the CPI for 2021 and the inflation rate in 2021. Does this inflation rate correctly measure the cost of living changes for households in 2021? Explain. "The transfer payment does not have any effect on the gross domestic product of an economy". Discuss the validity of this statement.

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