Question
Please solve this questions: 1. The typical household purchases two goods: apples and toothpaste. Each month, the household purchases 9 pounds of apples, while also
Please solve this questions:
1. The typical household purchases two goods: apples and toothpaste. Each month, the household purchases 9 pounds of apples, while also purchasing 5 tubes of toothpaste. In March 2022, the apples, on average, had a price of $1.95 per pound and the average price of the toothpaste was $2.75 per tube. In March 2023, the price of the apples increased to $2.25 per pound and the price of the toothpaste increased to $3.15 per tube. a. Using these values, solve for the CPI, assuming that March 2022 is the base month. b. Solve for the CPI growth rate between March 2022 and March 2023.
2. Wages a. If your total wage in March 2023 is $42,900, and the CPI is 114.21, solve for the real wage for the month of March 2023, based upon the total wage received for the month of March 2023. b. If you do not receive a wage increase in April 2023, but the CPI rises to 117.82, solve for the real wage for the month of April 2023. c. What is the relationship between the real wage and the CPI?
3. Suppose you take out a loan for school this year for $5750. The bank expects that the rate of inflation for next year will equal 9%. You and the bank agree that in one year's time, you will pay back the full amount at an interest rate of 14%. Next year though, there is a sudden rise in inflation, causing inflation to equal 15%. Based upon this information, answer the following questions. a. How much money will you pay back in one year, assuming simple interest? b. What is the numerical value for the anticipated rate of inflation in this example? c. What is the numerical value for the unanticipated rate of inflation in this example? d. What is the numerical value for the real rate of interest in this example? e. What is the numerical value for the nominal rate of interest in this example? f. Who benefits from this loan? Does the borrower or the lender benefit?
4. Given the following income, spending, and savings data, please answer parts a-g below: Disposable Income (DI) Consumption (C) Savings (S) $ 0 $. 30000 _________ $150000 $150000 _________ $300000 $270000 _________ $450000 $390000 _________ $600000 $510000 _________
a. Solve for savings at each level of disposable income (DI). b. Solve for the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) between each disposable income level. c. Solve for the average propensity to consumer (APC) and the average propensity to save (APS) at each level of disposable income. d. State the numerical value for the break-even level of disposable income in this example. e. State the numerical value for the autonomous consumption in this example. f. Using the data from the table, graph the consumption line. g. Using the data from the table, graph the savings line.
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