PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Question
Chapter 6, Problem 6P
(a)
To determine
Identify the change in the cost of eating index between 2015 and 2016
(b)
To determine
Identify the magnitude of the substitution bias.
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In Felixania, cat food constitutes 45 percent of the typical basket of goods for a typical consumer, dog food constitutes 3 percent, and all other goods constitute the remaining 52 percent. Assume the price of cat food rises by 4 percent, the price of dog food falls by 10 percent, and prices remain constant for all other goods. Based on the information given, we can definitely say
CORRECT ANSWER: the consumer price index (CPI) in Felixania is more than in the previous year.
Note:-
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Answer completely.
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Analysts say that the increase in gasoline prices comes a drop in SUV sales and trade-in values at dealerships.The U.S. Department of energy said that during the past week, U.S. gasoline topped $3 a gallon - the highest level since October 2008.
According to Alec Gutierrez,lead analyst for vehicle evaluation at Kelley Blue Book, SUV sales have decreased about 1 percent since the last major gasoline price hike in spring 2008. He doesn't believe that SUV sales will decrease significantly unless prices reach $3.50 to $4 per gallon.
if a gasoline price hike of 5 percent caused the SUV sales drop described, what is the cross-price elasticity of demand between gasoline and SUVs?
Hanna, who is a 5-year-old girl, eats nothing but pasta, yogurt, and lemonade. Each month her parents buy 27 pounds of pasta, 69
packages of yogurt, and 17 bottles of lemonade. These three items make up a basket of goods and services similar to the much larger
basket used by the Bureau of Labor Statistics (BLS) when computing the official Consumer Price Index (CPI). The table below lists the
average price for each item in this basket for the past four years.
Hanna's Meals
Pasta (dollars
Yogurt (dollars per Lemonade (dollars per
Year
per pound)
$1.86
1.99
package)
bottle)
$1.04
$2.22
1.11
2.38
2.13
1.19
2.55
2.73
4
2.28
1.27
Instructions: Round your answers to 2 decimal places.
a. For each year, calculate the CPI, using year 1 as the base year.
In year 1, the CPI was
In year 2, the CPI was
In year 3, the CPI was
In year 4, the CPI was
b. For each year, calculate the CPI, using year 3 as the base year.
In year 1, the CPI was
In year 2, the CPI was
In year 3, the CPI was
In year 4, the…
Chapter 6 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - Prob. 1PCh. 6 - Prob. 2P
Ch. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 6.1CCCh. 6 - Prob. 6.2CCCh. 6 - Prob. 6.3CCCh. 6 - Prob. 6.4CCCh. 6 - Prob. 6.5CCCh. 6 - Prob. 6.6CCCh. 6 - Prob. 6.7CCCh. 6 - Prob. 6.8CCCh. 6 - Prob. 6.9CC
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