Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 7, Problem 8CQ
To determine
Identify the movie that has the largest real box office receipts.
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In the country of Gastronamia, the CPI is calculated using a market basket consisting of 6 apples,
5 loaves of bread, 4 robes, and 3 gallons of gasoline. The per-unit prices of these goods have
been as follows:
Year
2008
2009
2010
2011
Apples
$1.00
$1.00
$2.00
$3.00
Bread
$2.00
$1.50
$2.00
$3.00
Robes
$10.00
$9.00
$11.00
$15.00
Gasoline
$1.00
$1.50
$2.00
$2.50
Using 2009 as the base year, determine the following:
places.)
(Round all to two decimal
2008 CPI:
2009 CPI:
2010 CPI:
2011 CPI:
2009 Inflation rate:
2010 Inflation rate:
2011 Inflation rate:
What would $30,000 earned in 1995 be equal to in 2011? The CPis for the two years are 152.4 and 223.47, respectively.
Below is a list of annual CPI values for the years 2000-2003. Using these values please calculate
the average annual rate of inflation over this period.
Table
Year
CPI
2000 200.2
2001 205.6
2002 208.2
2003 209.1
4.45%
1.46%
2.97%
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Macroeconomics: Private and Public Choice (MindTap Course List)
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- Tennis Balls Golf Balls Bottles of Gatorade 2020 price Rs.250 Rs.450 Rs.150 2020 quantity 100 100 200 2021 price Rs.25 Rs.653 Rs.255 2021 quantity 100 100 200 Using a method similar to the CPI, compute the percentage change in the overall price levelarrow_forwardAt the end of 1989, the consumer price index was 105. At the end of 1990, the CPI was 110. Calculate the inflation rate between these two periods.arrow_forwardQ)Suppose you earned $80,000 in 2018 and the CPI value for the year was 244. Calculate your 2018 income in 2000 dollars. The CPI value for the year 2000 was 171.arrow_forward
- Suppose the nominal median household income for a family of four in the United States was $24,618.00 in 1985, $36,678.00 in 1995, $50,326.00 in 2005, and $53,276.00 in 2010.You will need to know that the CPI (multiplied by 100, 1982–1984 = 100) was 108.6 in 1985, 153.4 in 1995, 196.3 in 2005, and 219.1 in 2010.Instructions: Enter your responses rounded to two decimal places. Year Real Income 1985 $ 1995 $ 2005 $ 2010 $ Between 1985 and 2005, the real median household income (Click to select) rose declined stayed constant . Between 2005 and 2010, the real median household income (Click to select) .arrow_forwardSuppose the nominal median household income for a family of four in the United States was $24,618.00 in 1985, $36,678.00 in 1995, $50,326.00 in 2005, and $53,276.00 in 2010.You will need to know that the CPI (multiplied by 100, 1982–1984 = 100) was 108.6 in 1985, 153.4 in 1995, 196.3 in 2005, and 219.1 in 2010.Instructions: Enter your responses rounded to two decimal places. Year Real Income 1985 $ 1995 $ 2005 $ 2010 $ Between 1985 and 2005, the real median household income (Click to select) rose declined stayed constant . Between 2005 and 2010, the real median household income (Click to select) rose declined stayed constant . rev: 01_31_2019_QC_CS-155719arrow_forwardAccording to the U.S. Census Bureau (www.census.gov), the median household income in the United States was $23,618 in 1985, $34,076 in 1995, $46,326 in 2005, and $49,276 in 2010. In purchasing power terms, how did family income compare in each of those four years?You will need to know that the CPI (multiplied by 100, 1982–1984 = 100) was 107.6 in 1985, 152.4 in 1995, 195.3 in 2005, and 218.1 in 2010. Instructions: Enter your responses rounded to two decimal places. Year Real Income 1985 $ 1995 $ 2005 $ 2010 $arrow_forward
- In each of the following cases, explain clearly how the CPI might misrepresent changes in consumer prices (Commodity substitution bias, Introduction of new goods, or Un-measured quality changes). In each case, speculate as to whether CPI overstates or understates consumer expenses. (a) By 1990, expensive personal computers became a common expenditure in consumer baskets. However, some governments were still calculating the consumer’s basket using a 1975 survey. (b) Between 2007 and 2015, there were significant improvements in smartphones. (c) Compared to 1970, households in 2015 took more vacations. (d) Food quality has deteriorated over time, even as consumers purchase the same amount.arrow_forwardItems 2016 2017 2018 Pizza $10 $20 $20 Cell Phone Service $90 $180 $180 Crude Oil (barrel) $90 $180 $90 Calculate the percentage increase in CPI from the base year( 2017) to 2018arrow_forwardShollar's annual incomes for 2002, 2006, and 2009 were $25 000, $51 000, and $42 800 respectively. Given that the CPI for the three years 100.0, 109.1, and 114.4 respectively, compute Shollar's real income for 2006 and 2009arrow_forward
- The CPI (using a 2020 base year) for 2000 is 65.0. Suppose a household's annual take-home pay in 2000 was $48,500. What would be an equivalent take-home pay in 2020?arrow_forwardBelow 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?arrow_forwardAs a result of a drought, prices and produced quantities in a country change as follows: Assume that the economy produces and consumes only the above agricultural products.a) Calculate the nominal GDP and the real GDP for the year 2021 with the base year 2020.b) By how many percent have the prices of goods increased?c) Calculate the CPI for the year 2021 according to Laspeyres and Paasche.d) Describe the general differences between the CPI and the GDP deflator.arrow_forward
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