Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 20.4.6PA
To determine
The inflation rate.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Below are the values of the CPI for each year from 1992-1996. For each year, beginning with 1993,
calculate the rate of inflation from the previous year.
Year
CPI
1992
1.40
1993
1.45
1994
1.48
1995
1.52
1996
1.57
Please enter your answers as percentages rounded to the nearest tenth of a percent (ie. if your
answer in your calculator is 0.02644 enter your answer as 2.6 or 2.6% not 3%, 2.644, or 0.026).
What is the inflation rate from 1992 - 1993?
What is the inflation rate from 1993-1994?
What is the inflation rate from 1994-1995?
What is the inflation rate from 1995-1996?
The "pizza connection" refers to the observation that in a major city, the cost of a slice of pizza is always about the same as the subway fare. Using the CPI values from the table
shown below and the CPI table, determine what a slice of pizza should have cost in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. What does this tell you about how
actual pizza prices changed compared to the CPI?
1984 1993 1997
2002
Year
Pizza Cost
2008 2011 2015
2.50 2.75 2.80
1.00
1.25
1.50
2.00
1.00
1.15
2.00
2.60 2.85
3.05
Subway fare
CPI
1.40
144.5 160.5 179.9 215.3 224.9
103.9
237.0
Click to view the CPI Table.
A slice of pizza should have cost $ in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI.
(Round to the nearest cent as needed.)
Data table
C
Year
1976 56.9
1977 60.6
1978 65.2
1979 72.6
1980 82.4
1981 90.9
1982 96.5
1983 99.6
1984 103.9
1985 107.6
Average Annual Consumer Price Index (1982-1984=100)
CPI
CPI
Year
CPI
1996 156.9
Year
1986
109.6
1987 113.6
1988 118.3…
The "pizza connection" refers to the observation that in a major city, the cost of a slice of pizza is always about the same as the subway fare. Using the CPI values from the table
shown below and the CPI table, determine what a slice of pizza should have cost in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. What does this tell you about how
actual pizza prices changed compared to the CPI?
Year
1984 1993 1997 2002 2008 2011 2015
1.00 1.25 1.50 2.00
2.50
2.75
2.80
1.00 1.15 1.40 2.00 2.60 2.85 3.05
103.9
Click to view the CPI Table.
Pizza Cost
Subway fare
CPI
144.5 160.5 179.9 215.3 224.9
237.0
←
A slice of pizza should have cost $ in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI.
(Round to the nearest cent as needed.)
Chapter 20 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 20 - Prob. 20.1.1RQCh. 20 - Prob. 20.1.2RQCh. 20 - Prob. 20.1.3RQCh. 20 - Prob. 20.1.4RQCh. 20 - Prob. 20.1.5RQCh. 20 - Prob. 20.1.6RQCh. 20 - Prob. 20.1.7PACh. 20 - Prob. 20.1.8PACh. 20 - Prob. 20.1.9PACh. 20 - Prob. 20.1.10PA
Ch. 20 - Prob. 20.1.11PACh. 20 - Prob. 20.1.12PACh. 20 - Prob. 20.1.13PACh. 20 - Prob. 20.1.14PACh. 20 - Prob. 20.2.1RQCh. 20 - Prob. 20.2.2RQCh. 20 - Prob. 20.2.3RQCh. 20 - Prob. 20.2.4PACh. 20 - Prob. 20.2.5PACh. 20 - Prob. 20.2.6PACh. 20 - Prob. 20.2.7PACh. 20 - Prob. 20.2.8PACh. 20 - Prob. 20.3.1RQCh. 20 - Prob. 20.3.2RQCh. 20 - Prob. 20.3.3RQCh. 20 - Prob. 20.3.4PACh. 20 - Prob. 20.3.5PACh. 20 - Prob. 20.3.6PACh. 20 - Prob. 20.3.7PACh. 20 - Prob. 20.3.8PACh. 20 - Prob. 20.4.1RQCh. 20 - Prob. 20.4.3RQCh. 20 - Prob. 20.4.4PACh. 20 - Prob. 20.4.5PACh. 20 - Prob. 20.4.6PACh. 20 - Prob. 20.4.7PACh. 20 - Prob. 20.4.9PACh. 20 - Prob. 20.4.10PACh. 20 - Prob. 20.5.1RQCh. 20 - Prob. 20.5.2RQCh. 20 - Prob. 20.5.3PACh. 20 - Prob. 20.5.4PACh. 20 - Prob. 20.5.5PACh. 20 - Prob. 20.5.6PACh. 20 - Prob. 20.5.7PACh. 20 - Prob. 20.5.8PACh. 20 - Prob. 20.6.1RQCh. 20 - Prob. 20.6.2RQCh. 20 - Prob. 20.6.3RQCh. 20 - Prob. 20.6.4RQCh. 20 - Prob. 20.6.5PACh. 20 - Prob. 20.6.6PACh. 20 - Prob. 20.6.7PACh. 20 - Prob. 20.6.8PACh. 20 - Prob. 20.6.9PACh. 20 - Prob. 20.7.1RQCh. 20 - Prob. 20.7.3RQCh. 20 - Prob. 20.7.5RQCh. 20 - Prob. 20.7.6PACh. 20 - Prob. 20.7.8PACh. 20 - Prob. 20.7.9PACh. 20 - Prob. 20.1RDECh. 20 - Prob. 20.5RDECh. 20 - Prob. 20.7RDECh. 20 - Prob. 20.10RDECh. 20 - Prob. 20.11RDECh. 20 - Prob. 20.1CTECh. 20 - Prob. 20.2CTE
Knowledge Booster
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage LearningEconomics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co