Suppose the residents of country P consume only peaches and pecans. The table below shows the prices and quantity of peaches and pecans consumed for two consecutive years. Note that all prices are per bushel. Suppose that the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Assume 2000 is the base year. Year 2000 2001 Peaches Price $11 $9 76 percent 10 percent What is the inflation rate in 2001? 43 percent 8.7 percent Quantity Price 9 12 Pecans $6 $10 Quantity 8 15

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose the residents of country P consume only peaches and pecans. The table below shows the
prices and quantity of peaches and pecans consumed for two consecutive years. Note that all prices are
per bushel. Suppose that the typical consumer basket consists of 10 bushels of peaches and 15
bushels of pecans. Assume 2000 is the base year.
Year
2000
2001
Peaches
Price
$11
$9
76 percent
10 percent
43 percent
8.7 percent
Quantity Price
9
What is the inflation rate in 2001?
12
Pecans
$6
$10
Quantity
8
15
Transcribed Image Text:Suppose the residents of country P consume only peaches and pecans. The table below shows the prices and quantity of peaches and pecans consumed for two consecutive years. Note that all prices are per bushel. Suppose that the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Assume 2000 is the base year. Year 2000 2001 Peaches Price $11 $9 76 percent 10 percent 43 percent 8.7 percent Quantity Price 9 What is the inflation rate in 2001? 12 Pecans $6 $10 Quantity 8 15
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