The "pizza connection" refers to the observation that in a major city, the cost of a slice of pizza is always about the same as the subway fare. Using the CPI values from the table shown below and the CPI table, determine what a slice of pizza should have cost in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. What does this tell you about how actual pizza prices changed compared to the CPI? 1984 1993 1997 2002 Year Pizza Cost 2008 2011 2015 2.50 2.75 2.80 1.00 1.25 1.50 2.00 1.00 1.15 2.00 2.60 2.85 3.05 Subway fare CPI 1.40 144.5 160.5 179.9 215.3 224.9 103.9 237.0 Click to view the CPI Table. A slice of pizza should have cost $ in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. (Round to the nearest cent as needed.) Data table C Average Annual Consumer Price Index (1982-1984=100) CPI CPI Year CPI 1996 156.9 Year 1986 109.6 1987 113.6 1988 118.3 1989 124.0 1990 130.7 1991 136.2 1992 140.3 1993 144.5 1994 148.2 1005 152 1 1997 160.5 1998 163.0 1999 166.6 2000 172.2 2001 177.1 2002 179.9 2003 184.0 2004 188.9 2005 Year 1976 56.9 1977 60.6 1978 65.2 1979 72.6 1980 82.4 1981 90.9 1982 96.5 1983 99.6 1984 103.9 1005 1076 105 2 Year CPI 2006 201.6 2007 207.3 2008 215.3 2009 214.5 2010 218.1 2011 224.9 2012 2013 2014 229.6 233.0 236.7 2015 227.0 X
The "pizza connection" refers to the observation that in a major city, the cost of a slice of pizza is always about the same as the subway fare. Using the CPI values from the table shown below and the CPI table, determine what a slice of pizza should have cost in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. What does this tell you about how actual pizza prices changed compared to the CPI? 1984 1993 1997 2002 Year Pizza Cost 2008 2011 2015 2.50 2.75 2.80 1.00 1.25 1.50 2.00 1.00 1.15 2.00 2.60 2.85 3.05 Subway fare CPI 1.40 144.5 160.5 179.9 215.3 224.9 103.9 237.0 Click to view the CPI Table. A slice of pizza should have cost $ in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. (Round to the nearest cent as needed.) Data table C Average Annual Consumer Price Index (1982-1984=100) CPI CPI Year CPI 1996 156.9 Year 1986 109.6 1987 113.6 1988 118.3 1989 124.0 1990 130.7 1991 136.2 1992 140.3 1993 144.5 1994 148.2 1005 152 1 1997 160.5 1998 163.0 1999 166.6 2000 172.2 2001 177.1 2002 179.9 2003 184.0 2004 188.9 2005 Year 1976 56.9 1977 60.6 1978 65.2 1979 72.6 1980 82.4 1981 90.9 1982 96.5 1983 99.6 1984 103.9 1005 1076 105 2 Year CPI 2006 201.6 2007 207.3 2008 215.3 2009 214.5 2010 218.1 2011 224.9 2012 2013 2014 229.6 233.0 236.7 2015 227.0 X
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: Measuring The Cost Of Living
Section: Chapter Questions
Problem 3CQQ
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Transcribed Image Text:The "pizza connection" refers to the observation that in a major city, the cost of a slice of pizza is always about the same as the subway fare. Using the CPI values from the table
shown below and the CPI table, determine what a slice of pizza should have cost in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI. What does this tell you about how
actual pizza prices changed compared to the CPI?
1984 1993 1997
2002
Year
Pizza Cost
2008 2011 2015
2.50 2.75 2.80
1.00
1.25
1.50
2.00
1.00
1.15
2.00
2.60 2.85
3.05
Subway fare
CPI
1.40
144.5 160.5 179.9 215.3 224.9
103.9
237.0
Click to view the CPI Table.
A slice of pizza should have cost $ in 2009 if it cost $1.00 in 1984 and prices had risen with the CPI.
(Round to the nearest cent as needed.)
Data table
C
Year
1976 56.9
1977 60.6
1978 65.2
1979 72.6
1980 82.4
1981 90.9
1982 96.5
1983 99.6
1984 103.9
1985 107.6
Average Annual Consumer Price Index (1982-1984=100)
CPI
CPI
Year
CPI
1996 156.9
Year
1986
109.6
1987 113.6
1988 118.3
1989 124.0
1990 130.7
1991 136.2
1992 140.3
1993 144.5
1994 148.2
1995 152.4
1997 160.5
1998 163.0
1999 166.6
2000 172.2
2001 177.1
2002
2003
179.9
184.0
2004 188.9
2005 195.3
Year CPI
2006 201.6
2007 207.3
2008 215.3
2009 214.5
2010 218.1
2011 224.9
2012 229.6
2013 233.0
2014 236.7
237.0
2015
X
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