Consider the simple economy that produces only three products. Use the information in the following table to calculate the (annual rate of) infation for 2018 as measured by the consumer price index (CPI)BASE YEAR (2010)20172018Quantity57.ProductPricePricePriceHairouts$10.00$11.00$16 20Hamburgers2.002.452.40Movies1015.0015.0014.00The infation rate for 2018 as measured by the consumer price index (CPI) is (Enter your response ounded to two decimal places)

here we calculate the Inflation rate for 2018 by CPI so the calculation as follow-here we calculate the Cost of basket base year by using given information which are as follow- Cost of basket in base year = P x Q (Haircuts ) + P x Q ( Hamburgers) + P x Q (movies) Cost of basket in base year = 5 x 10 + 7 x 2 + 10 x 15 Cost of basket in base year = 50 + 14 +150 Cost of basket in base year = $214 Cost of Basket in 2017 = P x Q (Haircuts ) + P x Q ( Hamburgers) + P x Q (movies) ---- in 2017 Cost of Basket in 2017 = 11 x 5 + 2.45 x 7 + 15 x 10 Cost of Basket in 2017 =55 + 17.15+ 150 Cost of Basket in 2017 = $222.15 Cost of Basket in 2018 = P x Q (Haircuts ) + P x Q ( Hamburgers) + P x Q (movies) ---- in 2018 Cost of Basket in 2018= 5 x 16.2 + 7 x 2.4 + 10 x 14 Cost of Basket in 2018 = 81 + 16.8 + 140 Cost of Basket in 2018= 237.8 CPI in 2017 = Cost of basket in given year / cost of basket in base year x 100 CPI in 2017 = $222.14 / $214 x 100 CPI in 2017 = $103.80 CPI in 2018 =$ 237.8 / 214 x 100 CPI in 2018 = 111.12 Now we calculate inflation rate - Inflation rate for 2018 = CPI 2018 - CPI 2017 / CPI 2017 x 100 Inflation rate for 2018 = 111.12 - 103.80 / 103.80 x 100 Inflation rate for 2018 =7.05% so here we conclude that , The inflation rate for 2018 measure by CPI is 7.05%

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Consider the simple economy that produces only three products. Use the information in the following table to calculate the (annual rate of infation for 2018 as measured by the consumer price inder (CP BASE YEAR (2010) Price $10.00 2.00 15.00 2017 2018 Product Quantity Price Price Haircuts $11.00 $16.20 Hamburgers Movies 245 240 14.00 10 15.00 The infation rate for 2018 as measred by the consumer price index (CP) isN Enter your sponse rounded to two decimal places)

Consider the simple economy that produces only three products. Use the information in the following table to calculate the (annual rate of infation for 2018 as measured by the consumer price inder (CP BASE YEAR (2010) Price $10.00 2.00 15.00 2017 2018 Product Quantity Price Price Haircuts $11.00 $16.20 Hamburgers Movies 245 240 14.00 10 15.00 The infation rate for 2018 as measred by the consumer price index (CP) isN Enter your sponse rounded to two decimal places)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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