Answered: sing the table above, what is the CPI…

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

100%

Using the table above, what is the CPI for 2001?

100

$8.00

$101

120

Using the table above, what is the CPI for 2018?

$144

142.6

100

$11.50

Using the table above, what is the CPI for 2019?

$146.75

145.4

100

$12

Using the table above, calculate the inflation rate for 2019 (2019 compared to 2018), as measured by the consumer price index. Round to the nearest tenth.

2.0%

1.5%

2.6%

-1.1%

Use the following table for the next two questions:
Consider a simple economy that only produces three goods: baseballs,
pizzas, and tables.
Product
Baseball
Pizza
Table
Quantity
10
15
8
Base Year Price
(2001)
$1.00
$5.00
$2.00
Price
Price
(2018) (2019)
$1.50
$7.00
$3.00
$1.75
$6.75
$3.50

Expert Solution

Step 1: Define consumer price index:

The consumer price index measures the average change in price paid by consumer for a particular basket of goods.

Formula:

CPI = (Cost of market basket at current year price / Cost of market basket at base year price) × 100.

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