In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI has 40 units of food and 20 units of clothing. Food Clothing Last year's price $10 $18 This year's price $14 $21 a) What are the percentage increases in the price of food? Number b) What are the percentage increases in the price of clothing? Number c) What is the percentage increase in the CPI? Number

In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute the CPI has 40 units of food and 20 units of clothing. Food Clothing Last year's price $10 $18 This year's price $14 $21 a) What are the percentage increases in the price of food? Number b) What are the percentage increases in the price of clothing? Number c) What is the percentage increase in the CPI? Number

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the CPI in the Year 2019 is 100. In 2019 consumers spent 50% of their income on food, 20% on shelter and 30% on education. Now if the prices of food and education fall by 10% in 2020, calculate the CPI and Rate of Inflation for the year 2020.
In a simple economy, people consume only 2 goods, food and clothing. The market basket of goods used to compute the CPI consists of 100 units of food and 20 units of clothing. (1) What are the percentage increases in the price of food and in the price of clothing? (2) What is the percentage increase in the CPI? (3) Do these price changes affect all consumers to the same extent? Explain. Food Clothing 2020 price per unit unite ¥8 Y 100 2021 price per unit Y 12e Y 200
explain it correctly
Price (2011) Quantity (2012) $5.00 $6.00 Item Quantity (2011) Price (2012) Magazines 450 200 $4.50 $8.00 $10.50 400 Movie tickets 50 Pizzas 100 $10.00 120 The data in the table above shows the consumption by families in an economy. The year 2011 is the reference base period. Based on the table above, the CPI for 2012 is A. 105.1. B. 5.0 percent. C. 102.5. O D. 100. O E. 98.5.
The good that receives the largest weight in the CPI is the good that a) has experienced the greatest price increase. b) consumers spend the largest fraction of their income on c) has the highest price. d) consumers buy most frequently.
The table below presents some data on the federal minimum wage and the CPI for several years. Fill in the column for “minimum wage in 2020 $s." Year Minimum wage CPI Minimum wage in 2020 $s 1949 $0.40 23.8 1968 $1.60 34.8 1995 $4.25 152.4 2020 $7.25 259.1 2024 (proposed) $15 306 (projected) What was the 1949 minimum wage equivalent to in 2020 $s?
One criticism of the CPI is that the market basket used in the CPI may not reflect current spending priorities. Which of the following is an example of this? Personal computers were less powerful in 1982-1984. Cell phones are more commonly purchased today than in 1993-1995. Using extreme couponing methods, a family can save hundreds of dollars a month. Goods cost more in Alaska and Hawaii due to transportation costs.
The price of a serving of McDonald's French fries in 1950 was 10¢. For simplicity, assume the price of a serving of McDonald's French fries today is $1.62, the CPI for 1950 is 23.5 and the CPI for today is 240.5. In terms of today's dollars, the real price of McDonald's French fries in 1950 was $ (Enter your response rounded to two decimal places.) Therefore in this example, the real price of McDonald's French fries has since 1950.
Period 1 Period 2 (base year) Period 3 Price Level Output Population 6 3 2 1 2 4 9 4 7 Use the above information to calculate the percent change in CPI between period 1 and 2. Express your answer as a decimal (rounded to the nearest thousandth).
Which goods are supposed to be included in the CPI? Group of answer choices All goods and services that typical consumers buy. All goods and services produced in the economy. All goods and services in the consumption component (C) of the GDP. All the goods, but not the services, in the consumption component (C) of the GDP.
The table below shows the prices a household must pay for goods they purchase regularly. Year Price of Bread Price of Peanut Butter Price of Milk 1 $2.00 $3.50 $4.10 2 2.25 3.65 4.15 3 2.40 3.70 4.18 Suppose the yearly consumption of the household 50 loaves of bread, 84 jars of peanut butter, and 25 gallons of milk. What is CPI in year 2, using year 1 as a base year? Multiple Choice The CPI is 105.31. The CPI is 107.81. The CPI is 522.85. The CPI is 1.05
Examine the following information as reported for the foods below in the years 2010 and 2019. 2010 2019 Item Price (S) Quantity Price (S) Quantity Eggs (one dozen) $2.75 27 $3.37 40 Chicken (500 g) $3.20 11 $3.57 7 Bread (675 g) $2.28 18 $2.83 23 a) Compute a simple price index for each of the items, using the year 2010 as the base year. Enter them in the same order as above: Eggs, Chicken, Bread. Round answers to 1 decimal. b) Compute a simple aggregate price index. Use 2010 as the base period. Round to one decimal place. c) Compute the Laspeyres price index for 2019 using 2010 as the base year. Round to one decimal place. d) Determine a value index for 2019, using 2010 as the base year. Round to one decimal place.