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

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

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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