Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 6, Problem 3QP
To determine
The total dollar expenditure.
Expert Solution & Answer
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Students have asked these similar questions
Britney is a baseball fan and attends several games per season. Her expenses per
season are listed in the table below:
Year
2
Year 1
5
Baseball $500$560
Tickets
Jersey
$120 $150
$150 $160
Food
Transport $60 S$70
Assuming that year 1 is the base year, calculate the price index for year 1 and for
year 2.
100, 113
100, 88
88, 113
88, 100
The table below shows the total expenditure on a basket of goods and services. Use this information to calculate index
numbers for the cost of a basket of goods and services in each period. Assume Period 3 is the base year. Round to one
decimal place.
Provide your answer below:
Period 1
Period 2
Period 3
Period 4
Total Expenditure
$3, 100
$3,350
$3,400
$3,450
Period 1 Period 2= Period 3 Period 4
Index Number
The following table shows a hypothetical situation for an economy that uses for an
average household of four people a basket of only three products to calculate the
consumer price index (CPI) between the years 2015 and 2018.
Product
Product A 20
Product B
Product C
98
100
131
133
50
2015
4
Quantity Price
$50
$52
$56
$100
55
$105
61
$113
$1,200 5
$1,210 5
$1,230
If the base year is 2015, what is the value of the consumer price index in 2015?
(round to the closest integer)
a
22
2016
P
Q
23
2017
P
Q
$55
$111
$1,225
22
62
2018
5
P
Chapter 6 Solutions
Macroeconomics
Ch. 6.1 - Prob. 1STCh. 6.1 - Prob. 2STCh. 6.1 - In year 1, your annual income is 45,000 and the...Ch. 6.2 - Prob. 1STCh. 6.2 - Prob. 2STCh. 6 - Prob. 1QPCh. 6 - Prob. 2QPCh. 6 - Prob. 3QPCh. 6 - Prob. 4QPCh. 6 - Prob. 5QP
Ch. 6 - Prob. 6QPCh. 6 - Prob. 7QPCh. 6 - Prob. 8QPCh. 6 - Prob. 9QPCh. 6 - Prob. 10QPCh. 6 - Prob. 11QPCh. 6 - Prob. 12QPCh. 6 - Prob. 13QPCh. 6 - Prob. 14QPCh. 6 - Prob. 1WNGCh. 6 - Prob. 2WNGCh. 6 - Prob. 3WNGCh. 6 - Prob. 4WNGCh. 6 - Prob. 5WNGCh. 6 - Prob. 6WNGCh. 6 - Prob. 7WNGCh. 6 - Prob. 8WNGCh. 6 - Prob. 9WNGCh. 6 - Prob. 10WNG
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Similar questions
- Is the consumer price index a good measure of the general price increase of consumers? How?arrow_forwardThe table identifies the prices (P1 and P2) of three goods in two different years, and it shows the market basket that is used to calculate the consumer price index. The base year is year 1. Good P1 P2 Basket Milk $4 (gallons) $4.20 6 Chicken $5 (pounds) $5.50 |12 Carrots $2 |(bags) $2.40 4 Enter numbers in each blank, rounded to two decimal places as necessary. The value of the CPI in year 1 is The value of the CPI in year 2 is The inflation rate is equal to %.arrow_forwardConsider an economy that produces and consumes bread and automobiles. In the following table are data for two different years. Year 2000 2010 Price of an automobile $40,000 $50,000 Price of a loaf bread $20 $30 Number of auto-mobiles produced 100 cars 120 cars Number of loaves of bread produced 600,000 loaves 500,000 loaves Using the year 2000, compute the following statistics for each year: nominal GDP, real GDP, the implicit price deflator for GDP, and a fixed-weight price index such as CPI. How much have prices risen between year 2000 and year 2010? Compare answers given by Laspeyres and Passche price indices. Suppose you are a senior public servant writing a bill to index Social Security and pensions. That is your bill will adjust these benefits to offset changes in the cost of living. Will you use the GDP deflator or the CPI? Explain emphasis on questions 2 and 3 .arrow_forward
- Consider an economy that produces and consumes hot dogs and hamburgers. In the following table are data for two different years. Good Hot dogs 120 2010 Hamburgers 200 150 160 Quantity Price Quantity Price 200 2020 None of the above. $2 250 Using 2010 as the base year, what is the implicit price deflator in 2020? $3 500 $4 $4arrow_forwardIn an economy, the total expenditure for a market basket of goods in year 1 ( the base year) was $4000. In year 2, the total expenditure for the same basket of goods was $ 4000. What was the price index for the economy in year 1? Year 2?arrow_forwardWhy do economists use index numbers to measure the price level rather than dollar value of goods?arrow_forward
- What will be the National income at current price if current price is $300 and the current quantity is 2000 unitsarrow_forwardThree goods are consumed in an economy during years 1 and 2. The table shows prices (P1 and P2) for each good, and it shows the market basket that is used to calculate the consumer price index. The base year is year 1. Good P1 P2 Basket Milk $4 (gallons) $4.20 12 Beef $2 (pounds) $2.20 20 Carrots $3 (bags) $3.60 8 Enter numbers in each blank, rounded to two decimal places as necessary. The value of the CPI in year 1 is and the value of the CPI in year 2 is ASUSarrow_forward[Consider the effects of an increase in the global price of oil. For a country such as Australia, which is a net exporter of oil, this development will imply that the CPI will increase roughly by the same amount as the increase in the GDP deflator.arrow_forward
- Suppose an economy consumes only two goods: food and entertainment. The following table shows quantities consumed and prices for three years: Year 0 (the base year), Year 1, and Year 2. QUESTION; compute inflation rates (from year 0 to year 1 and from year 1 to year 2) based on GDP deflator Item Year 0 Year 1 Year 2 Quantity (units) Price ($ / unit) Quantity (units) Price ($ / unit) Quantity (units) Price ($ / unit) Food 50 5 75 6 80 4 Entertainment 100 12 110 11 115 14arrow_forwardThe Consumer Price Index (CPI) is a measure of the average change in price over time from a designated reference period, at which it equals 100. The index is based on prices of basic consumer goods and services. The table provided lists the CPI for several years from 1960 to 2012. If the price change in cars parallels the change in the CPI, what would a car sell for (to the nearest dollar) in 2012 if a comparable model sold for $7,500 in 1999? Year CPI 1960 29.6 1973 1986 44.4 109.6 156.9 1999 2012 229.6 In 2012, a car would sell for approximately $ 58,176 (Round to the nearest dollar.)arrow_forwardConsider an economy that only produces and consumes two goods - cars and blankets. Suppose the inflation rate based on the consumer price index is higher during the year than that based on the GDP deflator. Assuming underlying tasted and preferences in the economy stay the same, what can you say about the price movements of cars and blankets during the year? The prices of cars and blankets must have changed at different rates, causing consumers to substitute one of the goods for the other. Since the GDP deflator is calculated based on what is actually purchased, it takes that substitution into account. O The relative price of cars and blankets must have remained unchanged. O The prices of cars and blankets must have changed at different rates, causing consumers to substitute one of the goods for the other. Because the consumer price index is a fixed-weight index, it understates the rate of inflation in this situation. O Regardless of what happened the prices of cars and blankets during…arrow_forward
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