Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 22, Problem 8SPA
To determine
Determine the
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The people on Coral Island buy only juice and cloth.
The CPI basket contains the quantities bought in
2009. The average household spent $60 on juice and
$30 on cloth in 2009 when the price of juice was $2
bottle and the price of cloth was $5 a yard. In the
current year, 2010, juice is $4 a bottle and cloth is $6
a yard.
a
percentage of
the household's budget spent on juice in 2009.
Calculate the CPI basket and the
The table shows the quantities of the goods Suzie bought and the prices she paid during two consecutive
weeks.
Week 1
Suzie's CPI market basket contains the goods she bought in Week 1.
Item
Quantity
14 cups
Price
Coffee
$2.50 a cup
Calculate the cost of Suzie's CPI market basket in Week 1 and in Week 2.
Books
1
$30.00 each
Gasoline
30 gallons
$1.75 a gallon
Week 2
What percentage of the CPI market basket is gasoline?
Item
Quantity
Price
$2.50 a cup
Calculate the value of Suzie's CPI in Week 2 and her inflation rate in week 2.
Coffee
14 cups
Books
4
$15.00 each
$2.25 a gallon
Gasoline
20 gallons
Concert
1 tícket
$95 each
The cost of Suzie's CPI market basket in Week 1 is $.
>>> Answer to 2 decimal places.
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# 3
In a simple economy, people consume only two goods: food and clothing. The market basket of goods used to compute
the CPI has 50 units of food and 10 units of clothing. Food Clothing Last year's price $4 $8 This year's price $6 $16 a.
What are the percentage increases in the price of food and in the price of clothing? b. What is the percentage increase
in the CPI? c. Do these price changes affect all consumers to the same extent? Explain
Chapter 22 Solutions
Macroeconomics
Ch. 22.1 - Prob. 1RQCh. 22.1 - Prob. 2RQCh. 22.1 - Prob. 3RQCh. 22.1 - Prob. 4RQCh. 22.1 - Prob. 5RQCh. 22.2 - Prob. 1RQCh. 22.2 - Prob. 2RQCh. 22.2 - Prob. 3RQCh. 22.2 - Prob. 4RQCh. 22.2 - Prob. 5RQ
Ch. 22.2 - Prob. 6RQCh. 22.2 - Prob. 7RQCh. 22.3 - Prob. 1RQCh. 22.3 - Prob. 2RQCh. 22.3 - Prob. 3RQCh. 22.3 - Prob. 4RQCh. 22.3 - Prob. 5RQCh. 22.3 - Prob. 6RQCh. 22 - Prob. 1SPACh. 22 - Prob. 2SPACh. 22 - Prob. 3SPACh. 22 - Prob. 4SPACh. 22 - Prob. 5SPACh. 22 - Prob. 6SPACh. 22 - Prob. 7SPACh. 22 - Prob. 8SPACh. 22 - Prob. 9SPACh. 22 - Prob. 10SPACh. 22 - Prob. 11SPACh. 22 - Prob. 12APACh. 22 - Prob. 13APACh. 22 - Prob. 14APACh. 22 - Prob. 15APACh. 22 - Prob. 16APACh. 22 - Prob. 17APACh. 22 - Prob. 18APACh. 22 - Prob. 19APACh. 22 - Prob. 20APACh. 22 - Prob. 21APACh. 22 - Prob. 22APACh. 22 - Prob. 23APACh. 22 - Prob. 24APACh. 22 - Prob. 25APACh. 22 - Prob. 26APACh. 22 - Prob. 27APACh. 22 - Prob. 28APACh. 22 - Prob. 29APA
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- Pete is a student who spends 10 percent of his expenditure on books and supplies, 30 percent on tuition, 30 percent on rent, 10 percent on food and drink, 10 percent on transportation, and the rest on clothing. The price index for each item was 100 in 2009. The table shows the price indexes in 2019. Item Price index in 2019 Books and supplies 172.6 Tuition 169.0 Rent 159.0 Food and drink 129.8 Transportation Clothing 115.4 92.9 What is Pete's CPI in 2019? Pete's CPI in 2019 is >>> Answer to 1 decimal place. [Hint: The contribution of each item to the CPI is its price weighted by its share of total expenditure.]arrow_forwardThe table shows the quantities of the goods Suzie bought and the prices she paid during two consecutive weeks. Suzie's CPI market basket contains the goods she bought in Week 1. Calculate the cost of Suzie's CPI market basket in Week 1 and in Week 2. What percentage of the CPI market basket is gasoline? Calculate the value of Suzie's CPI in Week 2 and her inflation rate in week 2. The cost of Suzie's CPI market basket in Week 1 is $ >>> Answer to 2 decimal places. m Week 1 Item Coffee Books Gasoline Week 2 Item Coffee Books Gasoline Concert Quantity 8 cups 1 25 gallons Quantity 8 cups 4 15 gallons 1 ticket Price $4.00 a cup $25.00 each $2.00 a gallon Price $4.00 a cup $12.50 each $2.50 a gallon $95 eacharrow_forwardKwabena earns 15 GHS per hour for up to 40 hours of work each week. He is paid 30 GHS per hour for every hour in excess of 40. Kwabena faces a 20 percent tax rate. Kwabena receives 80 GHS from the government as part of the Livelihood Empowerment Against Poverty (LEAP) program which is tax-free. There are 110 (non-sleeping) hours in the week. Graph Kwabena’s weekly budget line.arrow_forward
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