The table below lists the prices from last year and the base year for a college-related basket of goods. Assume that the typical basket of goods for a college student consists of 210 gallons of gas, 55 pizzas, 40 6-packs, and 5 textbooks. Basket of College-Related Goods Basket of Goods Gasoline (per gallon) Pizza (per pizza) Beer (per 6-pack) Textbook (per book). Price Base Year (dollars) $ 1.60 4.05 4.05 97.00 Price Last Year (dollars) $ 2.05 7.80 6.82 227.00 Instructions: Round your answers to two decimal places. a. Using the values above, what is the rate of inflation between the base year and last year? % b. Assume that rather than buying textbooks for their courses last year, all students decided to buy online access cards at $95 per textbook. What is the rate of inflation between the base year and last year now? %
The table below lists the prices from last year and the base year for a college-related basket of goods. Assume that the typical basket of goods for a college student consists of 210 gallons of gas, 55 pizzas, 40 6-packs, and 5 textbooks. Basket of College-Related Goods Basket of Goods Gasoline (per gallon) Pizza (per pizza) Beer (per 6-pack) Textbook (per book). Price Base Year (dollars) $ 1.60 4.05 4.05 97.00 Price Last Year (dollars) $ 2.05 7.80 6.82 227.00 Instructions: Round your answers to two decimal places. a. Using the values above, what is the rate of inflation between the base year and last year? % b. Assume that rather than buying textbooks for their courses last year, all students decided to buy online access cards at $95 per textbook. What is the rate of inflation between the base year and last year now? %
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:The table below lists the prices from last year and the base year for a college-related basket of goods. Assume that the typical basket
of goods for a college student consists of 210 gallons of gas, 55 pizzas, 40 6-packs, and 5 textbooks.
Basket of College-Related Goods
Basket of Goods
Gasoline (per gallon)
Pizza (per pizza)
Beer (per 6-pack)
Textbook (per book).
Price Base Year
(dollars)
$ 1.60
4.05
4.05
97.00
Price Last Year
(dollars)
$ 2.05
7.80
6.82
227.00
Instructions: Round your answers to two decimal places.
a. Using the values above, what is the rate of inflation between the base year and last year?
%
b. Assume that rather than buying textbooks for their courses last year, all students decided to buy online access cards at $95 per
textbook. What is the rate of inflation between the base year and last year now?
%
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