MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 7, Problem 7SQ
To determine
The increase in the price of banana and reduction in demand.
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Students have asked these similar questions
Changes in the consumer price index are useful in predicting changes in the producer price index.
Select one:
a. False
b. True
Assuming that the Consumer Price Index increases from 100 to 120...
Group of answer choices
Less money would be needed to buy the same amount of goods, implying that the value of money increases
Less money would be needed to buy the same amount of goods, implying that the value of money drops
More money would be needed to buy the same amount of goods, implying that the value of money increases
More money would be needed to buy the same amount of goods, implying that the value of money drops
Discuss the problems with the Consumer Price Index.
Chapter 7 Solutions
MACROECONOMICS FOR TODAY
Ch. 7.2 - Prob. 1GECh. 7.2 - Prob. 2GECh. 7.2 - Prob. 1YTECh. 7.2 - Prob. 2YTECh. 7 - Prob. 1SQPCh. 7 - Prob. 2SQPCh. 7 - Prob. 3SQPCh. 7 - Prob. 4SQPCh. 7 - Prob. 5SQPCh. 7 - Prob. 6SQP
Ch. 7 - Prob. 7SQPCh. 7 - Prob. 8SQPCh. 7 - Prob. 9SQPCh. 7 - Prob. 10SQPCh. 7 - Prob. 11SQPCh. 7 - Prob. 1SQCh. 7 - Prob. 2SQCh. 7 - Prob. 3SQCh. 7 - Prob. 4SQCh. 7 - Prob. 5SQCh. 7 - Prob. 6SQCh. 7 - Prob. 7SQCh. 7 - Prob. 8SQCh. 7 - Prob. 9SQCh. 7 - Prob. 10SQCh. 7 - Prob. 11SQCh. 7 - Prob. 12SQCh. 7 - Prob. 13SQCh. 7 - Prob. 14SQCh. 7 - Prob. 15SQCh. 7 - Prob. 16SQCh. 7 - Prob. 17SQCh. 7 - Prob. 18SQCh. 7 - Prob. 19SQCh. 7 - Prob. 20SQ
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- Is the consumer price index a good measure of the general price increase of consumers? How?arrow_forwardThe consumer price index (CPI) is a fixed-weight index. It compares the price of a fixed bundle of goods one year with the price of the same bundle of goods in some base year. Calculate the price of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2008, 2009, and 2010. Convert the results into an index by dividing each bundle price figure by the bundle price in 2008. Calculate the percentage change in your index between 2008 and 2009 and again between 2009 and 2010.Was there inflation between 2009 and 2010? QUANTITY CONSUMED 2008 PRICES 2009 PRICES 2010 PRICES GOOD 100 $1.00 $1.50 $1.75 Y 150 1.50 2.00 2.00 25 3.00 3.25 3.00arrow_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_forward
- The following table lists the per gallon prices of gas and milk for the months of April, May, and June. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that April is the base period. What is the consumer price index for May?arrow_forwardA) Inflation is the steady and widespread increase in prices. The inflation rate, measured by CPI, rose .1% in May (since April) and rose a total of 4% year-over-year (May 2022 to May 2023). Read the BLS report on the Consumer Price Index and identify an “item” or “all items” and begin to consider why the price increased. Do a news search or using (clear, logical, rational) reasoningexplain whether prices are increasing because demand increased or because supply decreased. Graph and explain your answerarrow_forwardQuestion No.9: The consumer price index (CPI) is a fixed-weight index. It compares the price of a fixed bundle of goods in one year with the price of the same bundle of goods in some base year. Calculate the price of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2011, 2012, and 2013. Convert the results into an index by dividing each bundle price figure by the bundle price in 2011. Calculate the percentage change in your index between 2011 and 2012 and again between 2012 and 2013. Was there inflation between 2012 and 2013? QUANTITY 2011 2012 2013 GOOD CONSUMED PRICE PRICE PRICE 100 $1.00 $1.50 $1.75 Y 150 1.50 2.00 2.00 25 3.00 3.25 3.00arrow_forward
- Define the term Consumer Price Index?arrow_forwardExamine the following information as reported for the foods below in the years 2010 and 2019. 2010 2019 Item Price (S) Quantity Price (S) Quantity Eggs (one dozen) $2.75 27 $3.37 40 Chicken (500 g) $3.20 11 $3.57 7 Bread (675 g) $2.28 18 $2.83 23 a) Compute a simple price index for each of the items, using the year 2010 as the base year. Enter them in the same order as above: Eggs, Chicken, Bread. Round answers to 1 decimal. b) Compute a simple aggregate price index. Use 2010 as the base period. Round to one decimal place. c) Compute the Laspeyres price index for 2019 using 2010 as the base year. Round to one decimal place. d) Determine a value index for 2019, using 2010 as the base year. Round to one decimal place.arrow_forwardThe Consumer Price Index measures the overall level of prices faced by:arrow_forward
- Which of the following statements is INCORRECT about the consumer price index? Question 5Answer a. It captures the weight or importance of the different goods and services in the basket chosen b. It measures the changes in the quantity of the typical goods and services that households consume c. It measures the changes in the prices of the typical goods and services that households consume d. It is a measure of inflationarrow_forwardQUESTION 3 You are given the following as it relates to the price of a tin of milk in Adam Island, 2018 to 2022: 2018- $1.30 2019 - $1.35 2020 - $1.40 2021 - $1.45 2022- $1.50 Using 2020 as the base year, calculate the index for 2018, 2019, 2020, 2021 and 2022. NB Index = (current price/base price) times 100. Also the value of the index IS NOT stated as a percentage. It is just the value you get from the calculation. Round to 1 decimal place,arrow_forwardThe table below details Student A's monthly purchases during 2019 and 2020. Answer the following questions writing out dollars and cents for monetary values e.g. $1.00, item weights to two decimal places e.g. 0.10, price index values as whole numbers without decimals, e.g. 110, and percentages to one decimal place e.g. 1.0%. Hotdogs Cans of Cola Chocolate bars Magazines Movies Prices ($) 2019 2.70 1.30 1.00 6.50 6.00 2020 2.80 1.25 1.00 7.50 5.75 Quantities (# consumed per month) 2020 With 2019 as the base year this index has changed by 2019 2 16 7 3 2 1 18 7 a. The value of Student A's 2019 shopping basket using 2019 prices is $ The item weights associated with this shopping basket are for magazines, and for movies. b. The value of Student A's 2019 shopping basket using 2020 prices is $ If 2019 is used as the base year, the 2020 value of Student A's price index is 2 3 for hotdogs, for cola, for chocolate bars, and the 2019 value of this index is then % between 2019 and 2020.arrow_forward
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