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Suppose people only consume two goods as shown below: Year 1: 40 apples at $1.40 each AND 60 pears at $1.50 each Year 2: 50
Suppose people only consume two goods as shown below:
- Year 1: 40 apples at $1.40 each AND 60 pears at $1.50 each
- Year 2: 50 apples at $1.60 each AND 80 pears at $1.60 each
- What is the change(%) in price for apples?
- What is the change(%) in price for pears?
- What is the market basket for Year 1?
- What is the market basket(hint: fix the quantity from year 1) for Year 2?
- Using Year 1 as the base year, what is the CPI for Year 2?
- What is the inflation rate for Year 2?
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Microeconomics
Authors: Douglas Bernheim, Michael Whinston
2nd edition
73375853, 978-0073375854
