Question

10. The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and prices for the base year (Year 1) and in the following two years. Product Base Year (Year 1) Quantity 15 4 Pizza T-Shirts Rent Price in the Base Year $3.50 $25.00 $300.00 Price in Year 2 $4.38 $22.50 $330.00 Price in Year 3 $4.73 $25.00 $360.00 1 The inflation rate between Year 1 and Year 2 is The inflation rate between Year 2 and Year 3 is %. (Round both answers to one decimal place.) % 11 Following below are four graphs and four market scenarios, each of which would cause either a movement along the

Answer 1

Price (103) Prooduct Price (102) Proice, Quantity (Base) 4.73 Pizza 15 3.50 4.38 25.00 T-shirts 25.00 22:56 360.00 1 330.00 Rent 300.00 CPTO CPIJ- CPIO X 100 Inflation Rate for year 2 foro Base years a = (15x3.5) + (4825) + (1x300) 52.5 + 100 4300 = $452.5 (15X4.38)+ (4x22.5) +1x330) = 65.7 + 90 +330 - $485.7 form year 3. (1584.73) + (4х25) + 1x360) 70.95 + 100+ 360 e ott t - $530,95 toutoane CPI of base Year 452.5 452.5 X 100 = 100 CPI of Yn 2- X 100 485. I 452.5 107. 34 (approx) CPI of Ya 38 x 100 530.95 452.5 117.34 (approx)

Inflation Rate b/w Yeart and Yn 2 407.34-100 x 100 100 7.34 % Inflation Rate b/w Yox 2 and Yn 3 117 34- 107.34 X100 107.34 = 9.32%