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 190 gallons of gas, 65 pizzas, 50 6-packs, and 4 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) $ 1.50 3.90 4.00 96.00 Price Last Year (dollars) $ 1.90 7.75 6.76 225.00 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 $105 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 190 gallons of gas, 65 pizzas, 50 6-packs, and 4 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) $ 1.50 3.90 4.00 96.00 Price Last Year (dollars) $ 1.90 7.75 6.76 225.00 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 $105 per textbook. What is the rate of inflation between the base year and last year now? %

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 1SCQ: Table 22.4 shows the fruit prices that the typing college student purchased from 2001 to 2004. What...

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Question

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 190 gallons of gas, 65 pizzas, 50 6-packs, and 4 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)
$ 1.50
3.90
4.00
96.00
Price Last Year
(dollars)
$ 1.90
7.75
6.76
225.00
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 $105 per
textbook. What is the rate of inflation between the base year and last year now?
%

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