Now you see what the BLS economist do, except with a more complex basket of goods. Now try to construct an index and determine the inflation rate on your own. The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? (5 points) Items Qty. 2001 2002 2003 2004 Price Amount Spent Price Amount Spent Price Amount Spent Price Amount Spent Apples 10 $0.50 $0.75 $0.85 $0.88 Bananas 12 $0.20 $0.25 $0.25 $0.29 Grapes 2 $0.65 $0.70 $0.90 $0.95 Raspberries 1 $2.00 1.9 2.05 2.13 $2.13 Total Construct the price index for a “fruit basket” in each year using 2003 as the base year. (5 points) Compute the inflation rate for fruit prices from 2001 to 2004. (5 points) Identify and contrast the differences between the rise in prices due to inflation and the rise in prices in microeconomic markets. (5 points)
Now you see what the BLS economist do, except with a more complex basket of goods. Now try to construct an index and determine the inflation rate on your own. The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? (5 points) Items Qty. 2001 2002 2003 2004 Price Amount Spent Price Amount Spent Price Amount Spent Price Amount Spent Apples 10 $0.50 $0.75 $0.85 $0.88 Bananas 12 $0.20 $0.25 $0.25 $0.29 Grapes 2 $0.65 $0.70 $0.90 $0.95 Raspberries 1 $2.00 1.9 2.05 2.13 $2.13 Total Construct the price index for a “fruit basket” in each year using 2003 as the base year. (5 points) Compute the inflation rate for fruit prices from 2001 to 2004. (5 points) Identify and contrast the differences between the rise in prices due to inflation and the rise in prices in microeconomic markets. (5 points)
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 34P: The total price of purchasing a basket of goods in the United Kingdom over four years is: year...
Related questions
Question
Now you see what the BLS economist do, except with a more complex basket of goods. Now try to construct an index and determine the inflation rate on your own.
- The table shows the prices of fruit purchased by the typical college student from 2001 to 2004. What is the amount spent each year on the “basket” of fruit with the quantities shown in column 2? (5 points)
|
Items |
Qty. |
2001 |
2002 |
2003 |
2004 |
||||
|
|
|
Price |
Amount Spent |
Price |
Amount Spent |
Price |
Amount Spent |
Price |
Amount Spent |
|
Apples |
10 |
$0.50 |
|
$0.75 |
|
$0.85 |
|
$0.88 |
|
|
Bananas |
12 |
$0.20 |
|
$0.25 |
|
$0.25 |
|
$0.29 |
|
|
Grapes |
2 |
$0.65 |
|
$0.70 |
|
$0.90 |
|
$0.95 |
|
|
Raspberries |
1 |
$2.00 |
|
1.9 |
|
2.05 |
|
2.13 |
$2.13 |
|
Total |
|
|
|
|
|
|
|
|
|
- Construct the price index for a “fruit basket” in each year using 2003 as the base year. (5 points)
- Compute the inflation rate for fruit prices from 2001 to 2004. (5 points)
- Identify and contrast the differences between the rise in prices due to inflation and the rise in prices in
microeconomic markets. (5 points)
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