The table shows the prices of fruit purchased by the typical college student from 2018 to 2020.(Note that a similar problem is shown in the lecture note with a solution)
1.1What is the amount spent each year on the "basket" of fruit with the quantities shown in column 2? (Fill out theyellow partof the table below)
Example Chart shows the fruit prices that the typical college student purchased from 2001 to 2004. What is the amount spent each year on the \"basket\" of fruit with the quantities shown in column 2? {2001} {2002) [2001) Amount (2002) Amount Items Price Spent Price Spent Apples $0.50 $0.75 Bananas $0.20 $0.25 Grapes 2 $0.65 $0.70 Raspberries 1 $2.00 $1.90 Total . Construct the price index for a \"fruit basket" in each year using 2003 as the base year. . Compute the inflation rate for fruit prices from 2001 to 2004. Example, Solutions Items Qty. 2001 2002 2003 2004 Qty. Price 333:\" Price 333:\" Price $33\" Price $35\" Apples 10 $0.50 $5.00 $0.75 $7.50 $0.85 $8.50 $0.88 $8.80 Bananas 12 $0.20 $2.40 $0.25 $3.00 $0.25 $3.00 $0.29 $3.48 Grapes 2 $0.65 $1.30 $0.70 $1.40 $0.90 $1.80 $0.95 $1.90 SEED\" $2.00 $2.00 1.9 $1.90 2.05 $2.05 2.13 $2.13 Total $10.70 $13.80 $15.35 $16.31 Solution : To compute the amount spent on each fruit in each year, you multiply the quantity of each fruit by the price. 10 apples X 50 cents each = $5.00 spent on apples in 2001 12 bananas X 20 cents each = $2.40 spent on bananas in 2001 2 bunches of grapes at 65 cents each = $1.30 spent on grapes in 2001 1 pint of raspberries at $2 each = $2.00 spent on raspberries in 2001 Adding up the amounts gives you to total cost of the fruit basket. The total cost of the fruit basket in 2001 was $5.00 + $2.40 + $1.30 + $2.00 = $10.70. The total costs for all the years are shown at the bottom of the table. Construct the price index for a \"fruit basket" in each year using 2003 as the base year. Compute the infle\"rm "M for fruit prices from 2001 to 2004. Screenshot 2. a. Example, Solutions Items Qty. 2001 2002 2003 2004 Qty. Price Amount Amount Amount Amount Spent Price Spent Price Spent Price Spent Apples 10 $0.50 $5.00 $0.75 $7.50 $0.85 $8.50 $0.88 $8.80 Bananas 12 $0.20 $2.40 $0.25 $3.00 $0.25 $3.00 $0.29 $3.48 Grapes 2 $0.65 $1.30 $0.70 $1.40 $0.90 $1.80 $0.95 $1.90 Raspber ries 1 $2.00 $2.00 1.9 $1.90 2.05 $2.05 2.13 $2.13 Total $10.70 $13.80 $15.35 $16.31 2. Construct the price index for a "fruit basket" in each year using 2003 as the base year. If 2003 is the base year, then the index number has a value of 100 in 2003. To transform the cost of a fruit basket each year, we divide each year's value by $15.35, the value of the base year, and then multiply the result by 100. The price index is shown in the table below. 2001 2002 2003 2004 69.71 89.90 100.00 106.3 Note that the base year has a value of 100; years before the base year have values less than 100; and years after have values more than 100.Example, Solutions 3. Compute the inflation rate for fruit prices from 2001 to 2004. The inflation rate is calculated as the percentage change in the price index from year-to- year. For example, the inflation rate between 2001 and 2002 is (89.9 - 69.71) / 69.71*100 = 28.97%. The inflation rates for all the years are shown in the last row of the table below. Items Qty. 2001 2002 2003 2004 Qty. Price Amount Spent Price Amount Amount Spent Price Amount Spent Price Spent Apples 10 $0.50 $5.00 $0.75 $7.50 $0.85 $8.50 $0.88 $8.80 Bananas 12 $0.20 $2.40 $0.25 $3.00 $0.25 $3.00 $0.29 $3.48 Grapes 2 $0.65 $1.30 $0.70 $1.40 $0.90 $1.80 $0.95 $1.90 Raspberries 1 $2.00 $2.00 1.9 $1.90 2.05 $2.05 2.13 $2.13 Total $10.70 $13.80 $15.35 $16.31 Price Index $69.71 $89.90 $100.00 $106.25 Inflation 28.97 11.23 6.25Items Qty. 2018 2019 2020 Price Amount Price Amount Price Amount Spent Spent Spent Apples 8 $0.50 $0.60 $0.80 Bananas 20 $0.20 $0.25 $0.30 Total amount spent Price Index Inflation Rate
