ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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2. Problems and Applications Q3
Suppose that people consume only three goods, as shown in this table:
2023
Price
Quantity
2024
Price
Quantity
Percentage Change
Tennis Balls
True
False
$2
100
$2
100
True
Golf Balls Bottles of Gatorade
Complete the following table by computing the percentage change in price for each of the three goods.
False
$4
100
$6
100
%
$2
200
$3
200
Tennis Balls Golf Balls Bottles of Gatorade
%
Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is
True or False: If you were to learn that a bottle of Gatorade increased in size from 2023 to 2024, that information would raise your estimation of the
inflation rate.
%
%
True or False: If you were to learn that Gatorade introduced new flavors in 2024, that would imply that the inflation rate you estimated is understated.
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Transcribed Image Text:2. Problems and Applications Q3 Suppose that people consume only three goods, as shown in this table: 2023 Price Quantity 2024 Price Quantity Percentage Change Tennis Balls True False $2 100 $2 100 True Golf Balls Bottles of Gatorade Complete the following table by computing the percentage change in price for each of the three goods. False $4 100 $6 100 % $2 200 $3 200 Tennis Balls Golf Balls Bottles of Gatorade % Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is True or False: If you were to learn that a bottle of Gatorade increased in size from 2023 to 2024, that information would raise your estimation of the inflation rate. % % True or False: If you were to learn that Gatorade introduced new flavors in 2024, that would imply that the inflation rate you estimated is understated.
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