Calculate the rate of inflation or delation between 2014 and 2015.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Calculate the rate of inflation or delation between 2014 and 2015. 

1. The following table shows the quantity of popcorn, Coke, and movie tickets a typical
consumer buys. It also shows the prices for those goods in 2014 and 2015. Assume that 2015 is the base year.
Good
Quantity
Price in
Price in
2014
2015
Рорсorn
4
$4
$5
Coke
$6
$8
Movie
5
$2
$3
Ticket
Transcribed Image Text:1. The following table shows the quantity of popcorn, Coke, and movie tickets a typical consumer buys. It also shows the prices for those goods in 2014 and 2015. Assume that 2015 is the base year. Good Quantity Price in Price in 2014 2015 Рорсorn 4 $4 $5 Coke $6 $8 Movie 5 $2 $3 Ticket
Expert Solution
Step 1.

Cost of basket, 2014 = 4 x 4 + 6 x 3 + 2 x 5 = 16 + 18 + 10 = 44

Cost of basket, 2015 = 5 x 4 + 8 x 3 + 3 x 5 = 20 + 24 + 15 = 59

 

 

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