Price indexes can be used to compare prices across different periods. Suppose that a year of tuition for college at public institutions averaged a cost of $1,905 in 1989 and that the CPI index was 116 in 1989. If the CPI index was 223 in 2009, then the cost of tuition in 2009, as the result of inflation, would equal $ Suppose that the actual average cost of tuition in 2009 was $7,058. Relative to the expected cost computed above, the cost of tuition increased by the amount (Enter your response rounded to the nearest whole number.) finflation.

Price indexes can be used to compare prices across different periods. Suppose that a year of tuition for college at public institutions averaged a cost of $1,905 in 1989 and that the CPI index was 116 in 1989. If the CPI index was 223 in 2009, then the cost of tuition in 2009, as the result of inflation, would equal $ Suppose that the actual average cost of tuition in 2009 was $7,058. Relative to the expected cost computed above, the cost of tuition increased by the amount (Enter your response rounded to the nearest whole number.) finflation.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 2.6IP

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The Consumer Price Index (CPI) is a measure of the average change in price over time from a designated reference period, at which it equals 100. The index is based on prices of basic consumer goods and services. The table provided lists the CPI for several years from 1960 to 2012. If the price change in cars parallels the change in the CPI, what would a car sell for (to the nearest dollar) in 2012 if a comparable model sold for $7,500 in 1999? Year CPI 1960 29.6 1973 1986 44.4 109.6 156.9 1999 2012 229.6 In 2012, a car would sell for approximately $ 58,176 (Round to the nearest dollar.)
Lynda and Tom have data on the nominal price of a liter of milk in Germany in 1990 and 2010, respectively. They would like to calculate the present increase in the real price of milk over this time interval. To this end, Lynda uses a consumer price index (CPI) with the base year set at 1995 and Tom uses a CPI with the base year set at 2005. There was positive inflation between 1995 and 2005 of 3%. Based on this, it can be concluded:a) Tom and Lynda will reach the same calculation of the percentage increase in the real price of milkb) nothing can be concluded about their calculations without knowing the growth rate of real GDP between 1990 and 2010c) the nominal price of milk decreased between that 2 yearsd) Tom’s calculation of the percentage increase in the real price of milk will be higher than Lynda’se) Lynda’s calculation of the percentage increase in the real price of milk will be higher than Tom’s
According to the college board the average in state tuition and fees for public four year colleges and universities increased from $1780 in 1990 to $9650 for the 2016-2017 school year. Calculate the relative change in public college cost over this time period, and compare it to the overall rate of inflation as measured by the CPI ( given that CPI for 1990 was 130.7 and 2016 was 240.0)
The price of oil is rising at 10% per year while inflation is just 2.5% per year. If the current price of oil is $45 per barrel, what would be the price of oil ten years from now in real dollars?
Q3.The amount of sugar produced in a sugar factory decreases by eight percent annually during the years 1401 to 1405. As a result, the amount of water consumed each year is ninety-two percent of the previous year. Suppose the cost of factory water consumption in 1401 is $ 80,000. With the annual inflation rate of twelve percent, get the current value of the factory water consumption. Use a payment set with a geometric slope to calculate the current value.
Calculate CPI and TCPI and comment on whether our cost management in the following project is reasonable. Give your answers to 2 decimals places. BAC=$20,000 EV=$19,000 PV=$19,000 AC=$17,000 CPI=Answer TCPI=Answer How reasonable is the prediction that we will finish the project on budget? Given our performance so far: We are being too optimistic thinking that we will complete the project on budget - we will probably finish the project over budget It is a reasonable assumption to think that we will complete the project on budget We are being too conservative - we will come in well under budget at this rate
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For the 1974-1975 academnic year, the annual tuition of Memphis was S1,500. The current tuition of Memphis is nearly $30,000 for the 2016-2017 academic year. Compute the average inflation rate in Memphis tuition to two decimal places over the years from 1974 to 2016.
Suppose a country is experiencing an annual inflation rate of 5%. The average cost of production for a specific industry has increased by 8% over the same period. The government has also introduced a new tariff on imported goods, resulting in an increase of 10% in the prices of those goods. Additionally, a new taxation policy has been implemented, leading to an overall tax rate of 15% on the industry's profits. If the cost of Medicare for the industry's employees has risen by 3%, calculate the total cost increase that the industry is facing due to these factors.
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