Ms. Vigor lives on carrot juice and tofu. In 2000, she bought 1,000 bottles of carrot juice
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Ms. Vigor lives on carrot juice and tofu. In 2000, she bought 1,000 bottles of carrot juice for $2.00 per bottle and 400 pounds of tofu for $3.00 per pound. In 2010, Vigor’s carrot juice cost $2.50 per bottle and her tofu cost $5.00 per pound. One way to calculate Vigor’s rate of inflation is
where C2000 = cost of 1,000 bottles of carrot juice and 400 pounds of tofu in 2000 and C2010 = cost of 1,000 bottles of carrot juice and 400 pounds of tofu in 2010. What was the percentage increase in Vigor’s cost of living between 2000 and 2010? If we calculate a Vigor Price Index (VPI) and scale this VPI to equal 100 in 2000, what is the 2010 value of the VPI?
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Related Book For
Essential Statistics Regression And Econometrics
ISBN: 9780123822215
1st Edition
Authors: Gary Smith
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