Suppose that the following table shows the average retail price of butter (the price of salted, grade AA butter per pound) and the Consumer Price Index (CPI) from 1980 to 2010, scaled so that the CPI = 100 in 1980. CPI Retail price of butter Real price of butter 1980 100.00 2.11 1990 158.56 2.46 Calculate the real price of butter in 1980 dollars. (Enter your responses rounded to two decimal places in the table below.) 1980 CPI Real price of butter 1990 2000 208.98 2.31 2000 Between 1980 and 2000, the real price of butter has What is the percentage change in the real price (in 1980 dollars) from 1980 to 2000? The real price of butter has decreased by%. (Enter your response rounded to two decimal places.) 1990 2010 Next, convert the CPI into 1990 = 100 and determine the real price of butter in 1990 dollars. 2010 218.06 2.77 To do this, first convert the CPI into 1990 dollars in the table below. (Enter your responses rounded to two decimal places in the table below.) 1980 2000 2010 Next, determine the real price of butter in 1990 dollars in the table above. What is the percentage change in real price (1990 dollars) from 1980 to 2000? The real price of butter decreased by%. (Enter your response rounded to two decimal places.)

Suppose that the following table shows the average retail price of butter (the price of salted, grade AA butter per pound) and the Consumer Price Index (CPI) from 1980 to 2010, scaled so that the CPI = 100 in 1980. CPI Retail price of butter Real price of butter 1980 100.00 2.11 1990 158.56 2.46 Calculate the real price of butter in 1980 dollars. (Enter your responses rounded to two decimal places in the table below.) 1980 CPI Real price of butter 1990 2000 208.98 2.31 2000 Between 1980 and 2000, the real price of butter has What is the percentage change in the real price (in 1980 dollars) from 1980 to 2000? The real price of butter has decreased by%. (Enter your response rounded to two decimal places.) 1990 2010 Next, convert the CPI into 1990 = 100 and determine the real price of butter in 1990 dollars. 2010 218.06 2.77 To do this, first convert the CPI into 1990 dollars in the table below. (Enter your responses rounded to two decimal places in the table below.) 1980 2000 2010 Next, determine the real price of butter in 1990 dollars in the table above. What is the percentage change in real price (1990 dollars) from 1980 to 2000? The real price of butter decreased by%. (Enter your response rounded to two decimal places.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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