The price of oil in 2005 was $3,350 per barrel. “This price is still lower than the price of oil in 1981” says a government publication. If inﬂation has averaged 3.2% per year from 1981 to 2005, what was the price per barrel of oil in 1981?

The price of oil in 2005 was $3,350 per barrel. “This price is still lower than the price of oil in 1981” says a government publication. If inﬂation has averaged 3.2% per year from 1981 to 2005, what was the price per barrel of oil in 1981?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The price of oil in 2005 was $3,350 per barrel. “This price is still lower than the
price of oil in 1981” says a government publication. If inﬂation has averaged 3.2% per year from 1981 to 2005, what was the price per barrel of oil in 1981?

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