The following table lists the prices of a small market basket purchased in both 2005 and 2015. Assume that this basket of goods is representative of all goods and services. Compute the price of themarket basket in (a) 2005 and (b) 2015 and then answer two questions about price levels and real income.首曾a. Cost of MarketPrice (per Unit)b. Cost of MarketBasket in 2015Basket in 2005(Quantity)"(2015price)ItemQuantity20052015(Quantity)"(2005 price)Coffee20 pounds$4$5Tuition1 year4,0007,000Pizza100 pizzas8.10DVD rental90 days10Gasoline1,000 gallons23Total2005Total2015c. By how much has the average price level risen between 2005 and 2015?Hint: Compare the total basket cost in 2015 to the total basket cost in 2005.d. The average household's nominal income increased from $40,000 to $60,000 between 2005 and 2015.What happened to real income?Real income

Cost of goods in current year = Quantity in base year* price of goods in current year. Increase in…

Answered: The following table lists the prices of…

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 6 Price of Beni's house increased from S100,000 to $200,000 in the last decade. Cost of living quadrupled (increased 4 times as much). What can you say about Beni's house? O The house is cheaper now, because if it had appreciated at the same rate as all other goods as services, it should have been 4 times more ($400,000) but it is $200,000 instead. Nominal price has inereased but also nominal prices of other goods have increased. So, the price costs the same. The house is more expensive now, comparing $200,000 to $100,000 We do not have enough information to compare prices across time.
1
Calculate the value of gross value added at market price when it's given that the value of output is $800 million and the intermediate consumption is $380 million in the Economy
Solve all subparts correctly and explains
3. In a small community, breakfast is the most important meal of the day. Therefore, the only two goods that this community produces are coffee and scones in the following amounts: Year 2020 2021 Quantity 60 cups 90 cups Coffee Price $1.25 $1.45 Quantity 45 units 65 units Scones Price $2.10 $3.95 a) Calculate the inflation rate for 2021 using the GDP deflator method (assume that 2020 is the base year for real GDP calculations). Show your work. b) Calculate the inflation rate for 2021 using the CPI method (assume that 2020 is the base year for CPI calculations). Additionally, assume that the consumption basket for both years contains only 10 cups of coffee and 40 scones. Show your work. c) Compare the results of both inflation calculations and explain why they are similar or different based on the two methods and on the specific data used in this example.
Consider the following table, which provides the price of beef and the price of all foods from 2014 to 2022. Price of Price of Relative Year All Food Beef Price 2014 96 98 102.08 2015 97 99 102.06 2016 100 100 2017 103 103 2018 104 105 2019 108 106 2020 111 114 2021 113 116 2022 116 114 The relative price of beef is calculated as: (Price of Beef/Price of all foods) x 100. In 2020, the relative price of beef was close to O 114.16 O 111.10 O 102.70 O 98.27
Using the table below, (See chapter 5 for price index) Price (per unit) Quantity (basket) 20 pounds Item 2018 (year) 2019 (year) Potato $2 $2.5 Onion 40 pounds $3 $3.1 Apple 30 pounds $1 $1.2 9. Compute the cost of the basket in each year. 10. By assuming the base year is 2018, derive price indexes of 2018 and 2019. 11. Using the price indexes from #10, calculate the inflation rate between 2018 and 2019. 12. Let's assume "nominal income" increased 4% between 2018 and 2019. Approximately how much percentage of "real income" did change between 2018 and 2019?
Robots at Kroger, Walmart, and Whole Foods The grocery industry is stepping up its investment in robot technology. Retailers are spending an estimated $3.6 billion in robot technology globally, and are expected to invest $12 billion by 2023. Source: Forbes, July 29, 2019 Explain how the widespread use of farm robots will change the rental rate of farm land. www. Q Search Most likely, the widespread use of retailers' robots will OA. decrease the value of marginal product of mall land will decrease OB. not change, the prices of the retail goods will not change OC. increase, the quantity of land used for malls will decrease OD. not change; the quantity of land used for malls will increase the rental rate of mall land because Next
When shopping you notice that a pair of jeans costs $20 and that a tee-shirt costs $10. You compute the price of jeans relative to tee-shirts. a. The dollar price of jeans and the relative price of jeans are both nominal variables. b.The dollar price of jeans and the relative price of jeans are both real variables. c.The dollar price of jeans is a nominal variable; the relative price of jeans is a real variable. d.The dollar price of jeans is a real variable; the relative price of jeans is a nominal variable. Select one: O a Ob
What is the value of the market basket for 2006? Quantity Price (2006) Quantity Price Item (2006) (2007) (2007) Restaurant meals 100 $10.00 100 $12.00 Weeks of parking 50 $100.00 50 $97.50

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