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20 Feb 2018
2000 2010
Average weekly wage $500 $750
CPI 170 220
The following table list the priced of small market basket purchase in both 2000 and 2010. Assuming that this basket of goods is representative of all goods and services,
(a) Compute the cost of market basket in 2000.
(b) Compute the cost of market basket in 2010
(c) By how much has the average price level risen between 2000 and 2010?
(d) The average household's nominal income increased from $30,000 to $60,000 between 2000 and 2010. What happend to it's real income?
Price (per Unit)
Item Quantity 2000 2010
Coffee 20 pounds $ 4 $ 5
Tuition 1 year 4,ooo 7,000
Pizza 100 pizzas 8 10
DVD rental 90 days 10 5
Gaslone 1,000 gallons 2 3
2000 2010
Average weekly wage $500 $750
CPI 170 220
The following table list the priced of small market basket purchase in both 2000 and 2010. Assuming that this basket of goods is representative of all goods and services,
(a) Compute the cost of market basket in 2000.
(b) Compute the cost of market basket in 2010
(c) By how much has the average price level risen between 2000 and 2010?
(d) The average household's nominal income increased from $30,000 to $60,000 between 2000 and 2010. What happend to it's real income?
Price (per Unit)
Item Quantity 2000 2010
Coffee 20 pounds $ 4 $ 5
Tuition 1 year 4,ooo 7,000
Pizza 100 pizzas 8 10
DVD rental 90 days 10 5
Gaslone 1,000 gallons 2 3
Beverley SmithLv2
22 Feb 2018
