Year Peaches $14 per bushel 2014 2015 $12 per bushel Select one: Refer to the Table 6-1. Suppose that the typical consumer basket consists of 5 bushels of peaches and 10 bushels of pecans and that the base year is 2014. What is the consumer price index for 2015? a. 100 b. 125 Pecans C. 80 d. 200 $9 per bushel $14 per bushel

Year Peaches $14 per bushel 2014 2015 $12 per bushel Select one: Refer to the Table 6-1. Suppose that the typical consumer basket consists of 5 bushels of peaches and 10 bushels of pecans and that the base year is 2014. What is the consumer price index for 2015? a. 100 b. 125 Pecans C. 80 d. 200 $9 per bushel $14 per bushel

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
3. Suppose an economy has two years worth of data, years 1 and 2. Sup- pose there are also two goods, bread and corn. Suppose, in year one, 30 units of corn are sold at a price of 1 $ and 20 units of bread are sold at a price of 2 S. Suppose in year two, 60 units of corn are sold at a price of 1.5 $ and 80 units of bread are sold at a price of 4 $. Compute nominal GDP in both periods. Compute real GDP under both defini tions of a base year. Compute also a chain weighted real GDP series. For all three measures, compute the GDP deflator
4. Do you think that incomes and purchasing power are related? Are companies required to pay their employees more to compensate for higher costs of living?
The economy of Scoob has the following output for 2019 and 2020, assuming 2019 is the base year, calculate the real GDP for 2020 in $ Gismo Applet Widgets Year Quantity Quantity Price Price Price Quantity 2019 $100 $10 $5 2020 $110 $12 10 $4 OA 225 O B. 250 O C. 200 O D. none of the above