In year 1 the price is $20 while output id 500. In year 2 the price is $21 while the production is still 500. What is the price index (PI) for year 2 assuming year 1 is the base year? a. 105 Ob. 100 OC. $10,000 O d. $10,500

In year 1 the price is $20 while output id 500. In year 2 the price is $21 while the production is still 500. What is the price index (PI) for year 2 assuming year 1 is the base year? a. 105 Ob. 100 OC. $10,000 O d. $10,500

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter8: Economic Fluctuations, Unemployment, And Inflation

Section: Chapter Questions

Problem 12CQ

See similar textbooks

Related questions

Q: purely competitive firm currently producing 35 units of output earns marginal revenues of $40 from…

A: A purely competitive firm currently producing 35 units of output earns marginal revenues of $40 from…

Q: The data in the table below are the monthly average variable costs (AVC), average total costs (ATC),…

A: Perfect competition: A firm in the competitive market is a price taker because it has large number…

Q: What category do labor market indicators fall under? (Select all that apply) a) Leading b) Lagging…

A: The workers and employers interact or employers hire workers in a place called the labour market.…

Q: 1) Suppose the U.S. government wants to stop importing foreign cars. They believe by not importing…

A: In this case, we have to discuss the terms absolute advantage and comparative advantage.. The…

Q: Answer the questions below based on the graph. What is the value of autonomous expenditures? What…

A: The consumption function is the function that shows the relationship between the consumption of a…

Q: 4. The following questions refer to the following graph of a consumer's indifference curve. a. b.…

A: The marginal rate of substitution (MRS) is the rate at which a given consumer will substitute his…

Q: Suppose rational decision-maker Dorothy has received a voucher for a free concert ticket that she…

A: In economics, an individual's reservation price is the most they are willing to spend for a specific…

Q: Investment Goods B D C Consumption Goods E Figure 17.5 A movement from point C to point B in Figure…

A: A production possibilities curve refers to a graphical representation of the various possible…

Q: Carbon dioxide emissions have been linked to melting of sea ice. The following table lists some…

A: The unintended and adverse side effects or costs that result from an economic activity or…

Q: Harding Enterprises has developed a new product called the “Quest Simulator (QS)”. The market demand…

A: Market demand defines the total quantity of a good or service that all customers in a given market…

Q: Hours of Studying 2 3 4 Ob. 5. OC. 4. d. 2. 6 18 14 19 23 26 Jose 14 10 18 28 32 35 Paul Marisol 4 9…

A: Marginal revenue:Marginal revenue is the additional unit that is added to the total revenue. It is…

Q: Draw a graph showing the aggregate production function, assuming diminishing marginal returns to…

A: An aggregate production function illustrates how an economy's total output, consisting of goods and…

Q: Compare three alternatives on the basis of their capitalized costs a i= 10% per year. Alternative…

Q: dont use chatgpt i will 5 upvot How does pollution violate consumers’ negative right? A. They are…

A: Consumer refers to an individual or entity that buys goods or services for the purpose of the…

Q: In the figure to the right, the importing country imposes a tariff that raises the domestic price…

A: It can be defined as a duty that is imposed by the central authority of the economy on the import…

Q: Refer to Figure 13.2.3. Assume this firm faces demand curve D2. If the firm produces the efficient…

A: Profits are defined as the revenue earned over and above the cost.Now the Profits is maximised at…

Q: According to the income elasticity formula, Income elasticity of demand = Ej= % change in quantity…

A: Income elasticity is calculated as the percentage change in quantity divided by the percentage…

Q: Two television networks (X and Y) are considering paying for the right to show movie A and/or movie…

A: Nash equilibrium refers to a state where each player's strategy is optimal, given the strategies of…

Q: You run a monopoly firm that serves two types of consumers. Individual type-A consumers have a value…

A: The monopoly firm follows the price discrimination strategy to maximize the profit. Price…

Q: The consumer price index (CPI) A. measures the price of a fixed basket of goods and services.…

A: The Consumer Price Index (CPI) is a broadly utilized economic marker that measures the typical…

Q: Imagine you are the CEO of Future Industries, a company located in Republic City. The head of the…

A: The economic profit refers to the total cost borne by the economy which also includes the additional…

Q: Quantity of Labor Total Product Total Revenue 1 4 $ 18 2 8 36 3 11 50 4 13 59 5 14…

A: Total revenue can be defined as a total receipts a seller earns from selling products or services to…

Q: lements of fiscal policy that move the budget toward surplus as the economy expands and toward…

A: The fiscal policy refers to the policy of government concerning expenditure and taxes. The…

Q: What would be the likely impact of an increase in the price of petrol on the market for pizzas in…

A: Price basically refers to the monetary value of the goods or services that is sold in the market.…

Q: Discuss the differences between long-term and short-term economic growth. What are the determinants…

A: A hike in the manufacture of products and services in an economy relative to one period of time…

Q: Which of the following is not one of the three central coordination problems of the economy given in…

A: The economy is a complex system where the allocation of resources, production, and distribution of…

Q: Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all…

A: Marginal Utility: The additional satisfaction or pleasure a consumer derives from consuming one more…

Q: Solow model: An earthquake destroys a good portion of the capital stock but does not affect the…

A: Solow Model: It refers to a economic growth model in the long run. The model says with the help of…

Q: Which one of the following statements about a firm’s cost curves is true? A. The average variable…

A: The explicit cost refers to the cost expressed in monetary terms. The implicit are not directly…

Q: The depletion of the ozone layer is attributed to the emission of Chlorofluorocarbons (CFCs). Before…

A: Environmental regulation refers to a system of rules, laws, policies, and standards established by…

Q: Suppose a small economy produces only smart TVs. In year one, 84,000 TVs are produced and sold at a…

A: The Real GDP is the value of the goods and services produced in the economy adjusted for…

Q: You have a log utility, U = In(W), where W is your wealth. Currently, you own $1,000. You are given…

A: Utility:The utility is want satisfying power of a commodity. It can be expressed in cardinal and…

Q: During the COVID 19 pandemic that began to adversely impact the U.S. economy in early 2020, the…

A: The COVID-19 pandemic influenced the decline of productivity around the world. There are a number of…

Q: If the cost of tuition is $1,000; books cost $500; supplies cost $100; and you could have earned…

A: Opportunity Cost: It refers to the foregone revenue on the next best alternative if we pick a…

Q: Read Eye on Potential GDP in the eText or click on the icon following exercise to open a copy. Then…

A: The amount of people available in the market for jobs is known as labour supply. These people demand…

Q: Suppose there is an exogenous change to the market for apples that caused supply of apples to…

A: A market refers to a place at which the buyers and seller of goods and services comes in contact…

Q: The elasticity of supply is most influenced by O portion of the consumer's budget O time O the…

A: Elasticity of supplyThe price elasticity of supply is calculated by dividing the percentage…

Q: QUESTION 4 Economics is a that studies how physical science: people make decisions; scarcity social…

A: Economics, as a social science, delves into the examination of how individuals, businesses, and…

Q: 6. Indifference curves and utility maximization Kevin is in a band and likes to advertise upcoming…

A: Utility maximization problem: With the given prices and the income, a consumer chooses his…

Q: (14 of 15) Suppose that in 2015 your salary was 40,000, and the CPI was 175. Further suppose that in…

A: % increase in nominal salary between 2015 and 2016 = {[Salary (2016) - Salary (2015)] / Salary…

Q: ow do market power, market concentration, and choice apply to the healthcare industry?

A: Healthcare, frequently composed as health care, is an expansive and multifaceted term that…

Q: If country A uses all of its resources efficiently, it can produce a maximum of 100 units of good X.…

A: Production possibility frontier or PPF shows the different combinations of two goods that can be…

Q: If the economy is producing at the potential level of output, Yp, but there is a trade deficit. How…

A: Fiscal policy alludes to the utilization of government spending and taxation to impact the economy.…

Q: The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The…

A: Producer surplus represents the difference between the amount a producer is willing to accept for a…

Q: Dollars C BA 0 d Multiple Choice MC ATC Quantity Refer to the diagram. At output level Q, total cost…

A: Total cost is the product of quantity and the prices. In simpler words, it means the sum total of…

Q: Mark launders his white clothes using the production function q=4B+G, where B is the number of cups…

A: Marginal Rate of technical substitution : Rate at which one factor of production is decreased in…

Q: In a country a government chooses to increase the tax on gas for $0.20 per gallon. Though the price…

A: In a country a government chooses to increase the tax on gas for $0.20 per gallon. Though the price…

Q: entertainment budget is $150. Dan's best friend Jay tells Dan that his favorite thing to do is go to…

A: Budget constraint depicts the combination of two goods that are affordable, given the prices of two…

Q: Incorrect 50 0 0 Incorrect 50 100 150 200 250 300 350 400 450 500 Real disposable income (DI) -50…

A: The decline in the consumer income expectation is one way to demonstrate the income effect. If the…

Question

In year 1 the price is $20 while output id 500. In year 2 the price is $21 while the
production is still 500. What is the price index (PI) for year 2 assuming year 1 is the base
year?
a. 105
Ob. 100
c. $10,000
d.
$10,500

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Defining price index

VIEW

Step 2: Calculating price index

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Year Units of Output Price per unit 8 1 2 3 4 5 If year 2 is the base year, what is the consumer price index for year 1? 10 15 18 20 4 5 6 3 4
The Consumer Price Index had a value of 218.8 in 2018 and a value of 226.23 in 2019. a. What was the inflation rate in 2018? b. If you borrowed $2500 in 2018 at an annual interest rate of 5.2%, what was the real interest rate of your loan based on the inflation rate in 2018 that you calculated above? 46 F Rain showers sc F1 1 1 Q Je A N 2 F2 2 W S - X Alt F3 3 E D F4 C 4 $ R F FS 5 % V F6 T Q Search G 6 B F7 C ^ Y H 7 FB & U N F9 8 J 80 * LG I M F10 9 K ( F11 - O . 0 ) Alt L : Ins = + Ctrl E 13? "1 Del Backspace PgUp Home Enter PgOn End 7 Home Shift L
Those are the production numbers for 3 different years for country B (50pts) Year Price of Bananas $ Quantity of bananas kg. Price of backrubs $ Quantity of backrubs 1 1.00 5 6.00 5 2 1.00 5 6.00 7 3 2.00 10 6.00 9 Calculate real and nominal GDP for year 1, 2 and year 3 when base year is year 1. Compute inflation in country B from period 1 to period 2. Compute inflation rate from period 1 to 3 Compute inflation rate from period 2 to 3 Calculate GDP with Chain weighted method for period 3. Compare the result with the answer in part a.
The average price of gasoline in 2005 was $2.31 per gallon. In 1993, the average price was $1.07.∗ What was the average annual rate of increase in the price of gasoline over this 12-year period?
The cost of a market basket of goods and services in $200 in Year 1 and $220 in Year 2. If Year 1 is the base year, what is the price index for Year 1? a. 115 b. 100 c. 120
Suppose your annual nominal income for the next four years is $78,500, and the annual inflation rate is 7.1%. Calculate the real value of your $78,500 salary at the end of the fourth year. A. $57,847.11 B. $59,664.06 C. $65,768.24 D. $71,987.16 E. $73,142.88
Bike Washer car TV Yr1 300 1560 5600 52 Yr2 310 1570 5610 53 Y3 325 1585 5650 54 Yr4 350 1610 5700 55 Using the information above -Give the consumer price index for years one, two, three, and four -State what the percent rate of change in the CPI/inflation will be from year 1 to year 2, from year 2 to year 3, from year 3 to year 4. (round to the whole number for all calculations and final answers)
2a. Compute the price index for each year. Use the first year as the base year. What was the inflationrate between the two years.Item Quantity Unit Price-Last Year Unit Price-This YearCoffee 20 pounds $3.00 $4.00Tuition 1 year 4,000.00 7,000.00Pizza 100 pizzas 8.00 10.00VCR rental 75 days 15.00 10.00Vacation 2 weeks 300.00 500.00
Please answer a and b. Year Price Index Costs Benefits 0 100 $10,000 $0 1 104 $0 $6,000 2 108.16 $0 $6,000 The table above lists the costs and benefits that accrue to investment in education. The table lists a price index that reflects the expectation that in each of the two years after the investment has been made, the level of inflation will be 4% while the interest rate in the market will remain constant at 6% per year. a. Use the market interest rate as the discount rate to convert the nominal values of the costs and benefits to present values. b. Does the present value of the benefits exceed the present value of the costs. c. Why would persons want to invest in their human capital while they are young? d. Explain why some persons make new human capital investments when they are older.
If price index for the current year is 150 and national income at current price is $150000 million Then the national income at constant price will be:-
The value of a price index in the base year is 0 100 200 The inflation rate The average cost of a market basket of goods. If your wage doubles at the same time as the consumer price index goes from 100 to 300, your real wage Doubles Falls Increases Stays the same Cannot be determined
A basket of goods in 2005 costs $625; the same basket of goods cost $800 in 2010.What is the percentage change in the price level between 2005 and 2010? Question 7Answer a. -21.875% b. 28% c. 55% d. 0%