The following table lists the prices of a small market basket purchased in both 2005 and 2015. Assume that this basket of goods is representative of all goods and services. Compute the price of themarket basket in (a) 2005 and (b) 2015 and then answer two questions about price levels and real income.首曾a. Cost of MarketPrice (per Unit)b. Cost of MarketBasket in 2015Basket in 2005(Quantity)"(2015price)ItemQuantity20052015(Quantity)"(2005 price)Coffee20 pounds$4$5Tuition1 year4,0007,000Pizza100 pizzas8.10DVD rental90 days10Gasoline1,000 gallons23Total2005Total2015c. By how much has the average price level risen between 2005 and 2015?Hint: Compare the total basket cost in 2015 to the total basket cost in 2005.d. The average household's nominal income increased from $40,000 to $60,000 between 2005 and 2015.What happened to real income?Real income

Cost of goods in current year = Quantity in base year* price of goods in current year. Increase in…

Answered: The following table lists the prices of…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Measuring The Cost Of Living

Section: Chapter Questions

Problem 3PA

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The economy of Greatstown produces Oranges, Strawberries, and Peaches. Below are the prices and quantities of these products produced between 1999 and 2001: Year 1999 1999 2000 2000 2001 2001 Price Quantity Price Quantity Price QuantityOranges $0.9 5 $1.4 3 $1.3 2Strawberries $0.7 3 $1.4 5 $1.9 6Peaches $1.7 9 $1.8 8 $0.5 8 Calculate Greatstown’s nominal GDP in 2000. Calculate Greatstown’s real GDP in 2001, using 1999 as the base year.
y. "The economy produces three goods: Cell Phones, Computers and Cars. In this economy, cell phone and computer prices have been falling over time, while car prices have increased over time. The prices and quantities of these goods, in two different years (year 1 and year 2), are given below 1 2 Quantity of Cell Phones Quantity of Computers Quantity of Cars Price of Cell Phones (8) 100 Price of Computers (8) 1000 600 Price of Cars (8) 100 150 50 100 10 12 80 5000 8000 a Use a Laspeyres index to determine how much prices have changed from year 1 to year 2. Show your working. (Hint: You will first construct real DP growth using Laspeyres index) b. Use Paasche index to determine how much prices have changed from year 1 to year 2. Show your working. (Hint: You will first construct real GDP growth using Paasche index)
from the table below: price and quantity for three types of products year 2018 price of pencils 0.50 quantity of pencils 200 price of pens 0.70 quantity of pen 150 price of markers 2.20 quantity of markers 70 year 2019 price of pencils 0.80 quantity of pencils 150 price of pens 1.30 quantity of pen 100 price of markers 2.60 quantity of markers 150 year 2020 price of pencils 1.20 quantity of pencils 100 price of pens 2.00 quantity of pen 50 price of markers 3.50 quantity of markers 200 a) Calculate nominal gdp for each year. b) Calculate real Gdp for each year(base year.2018)
Which of the following pair of goods are Substitute goods:- (A) Bread and butter (B) Tea and sugar (C) Pen and ink (D) None of the above
Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period. Seafood 2000Qty. (lb) 2000Price ($/lb) 2009Price ($/lb) Halibut 75,290 2.01 2.33 Lobster 83,080 3.62 3.09 Tuna 50,779 1.87 1.97 (a) Compute a price relative for each type of seafood. (Round your answers to one decimal place.) Seafood Price Relative Halibut ? Lobster ? Tuna ? (b) Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.) I2009 = ?? Comment on the change in seafood prices over the nine-year period. (Enter your percentage as a positive value. Round your answer to one decimal place.) Seafood prices have Up/down by ? % over the 9-year period according to the index.
Which of the graph/s below show/s a rise in the price of chicken? Fish (pounds per year) Fish (pounds per year) Chicken (pounds per year) Figure B Chicken (pounds per year) Figure A Fish (pounds per year) Fish (pounds per year) Chicken (pounds per year) Chicken (pounds per year) Figure C Figure D Figure A Figure B Figure C Figure D Figures C and D
Suppose that we have the following price data Year Price of Gasoline Price of Soda 1987 $.89 per gallon $.35 per 16 oz. bottle 2005 $ 2.39 per gallon $1.49 per 16 oz. bottle a) Calculate the percentage change in the price of each good. b) Calculate the percentage change in the relative price of gasoline in terms of soda. Year Relative Price of Gasoline 1987 $.89 / .35 = 2.54 2005 $ 2.39 /1.49 = 1.60 c) Why do we only worry about relative prices in economics?
Price (dollars per pizza) 6 S S2 Quantity (millions of pizzas per year) In the above figure, the movement from point a to point b reflects a decrease in the cost of the tomato sauce used to produce pizza. an increase in the number of producers of pizza. an increase in the supply of pizza. a decrease in income if pizza is a normal good. an increase in the price of pizza.
A typical consumer's "leisure basket" in the base year 2019 is as follows: 20 movie tickets $15.00 each 4 theme park tickets $80.00 each 30 swimming passes $10.00 each 2 interstate holidays $400 each 1 international holiday $2000 each The closure of international borders decreases demand for international holidays in 2020. This causes interstate holidays to rise in price to $800 each. The price of other items in the leisure basket are unchanged. a. Calculate the change (as a percentage) in the "leisure index" between 2019 and 2020. b. Suppose consumer preferences change in 2020 and they are completely indifferent between two interstate holidays and one international holiday. In this situation, how large is the substitution bias in the "leisure index"? c. Explain how biases in the "leisure index" create a difference between the price changes consumers experience and the price changes described by the "leisure index".
Question 18 Restaurant Supply, Inc. sells cheese to Windy City Pizza for $1,000. Windy City Pizza uses the cheese to make pizzas, selling them to consumers for a total of $10,000. to the gross domestic product (GDP). These transactions contribute a) $100 b) $1,000 c) $9,000 O d) $10,000 O e) $11.000
Do you think that the increase in the price of rice also increases the income of the agri-farmers? Expand.
(Table: Martinez Family Household Income and Expenditures) Use Table: Martinez Family Household Income and Expenditures. For the Martinezes, falafel is a(n) good. Table: Martinez Family Household Income and Expenditures Quantity purchases per month Monthly income $2,000 $3,000 O positive O neutral normal O inferior Hamburgers 2 2 Books 4 6 Online movie rentals 6 6 Falafel 8 6

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