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redfox51Lv1
11 Dec 2019
Suppose that people consume only three goods as shown in this table:
Tennis ball
Golf ball
Bottles of Gatorade
2011
Price
$2
$4
$1
Quantity
100
100
200
2012
Price
$2
$6
$2
Quantity
100
100
200
1. What is the percentage change in the price of each of the three goods?
2. Using a method similar to the consumer price index, compute the percentage change in the overall price level.
3. If you were to learn that a bottle of Gatorade increased in size from 2011 to 2012, should that information affect your calculation of the inflation rate? If so, how?
4. If you were to learn that Gatorade introduced new flavours in 2012, should that information affect your calculation of the inflation rate? If so, how?
Suppose that people consume only three goods as shown in this table:
|
Tennis ball |
Golf ball |
Bottles of Gatorade |
|
2011 |
Price |
$2 |
$4 |
$1 |
Quantity |
100 |
100 |
200 |
|
2012 |
Price |
$2 |
$6 |
$2 |
Quantity |
100 |
100 |
200 |
1. What is the percentage change in the price of each of the three goods?
2. Using a method similar to the consumer price index, compute the percentage change in the overall price level.
3. If you were to learn that a bottle of Gatorade increased in size from 2011 to 2012, should that information affect your calculation of the inflation rate? If so, how?
4. If you were to learn that Gatorade introduced new flavours in 2012, should that information affect your calculation of the inflation rate? If so, how?
Sonal BahlLv10
30 Sep 2020