Suppose that people consume only three goods, as shown in this table:
Year
Tennis Balls
Golf Balls
Bottle of Gatorade
Price
2020
$2
$4
$1
Quantity
2020
100
100
200
Price
2021
$2
$6
$2
Quantity
2021
100
100
200
Compute the percentage change in price for each of the three goods.
Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is __________.
If you were to learn that a bottle of Gatorade increased in size from 2020 to 2021, that information would_______ your estimation of the inflation rate.
If you were to learn that Gatorade introduced new flavors in 2021, that information would_________ your estimation of the inflation rate.
Suppose that people consume only three goods, as shown in this table:
| Year | Tennis Balls | Golf Balls | Bottle of Gatorade | |
| Price | 2020 | $2 | $4 | $1 |
| Quantity | 2020 | 100 | 100 | 200 |
| Price | 2021 | $2 | $6 | $2 |
| Quantity | 2021 | 100 | 100 | 200 |
Compute the percentage change in price for each of the three goods.
Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is __________.
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Related questions
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?
