The table below lists the prices and quantities consumed of three different good
ID: 1218729 • Letter: T
Question
The table below lists the prices and quantities consumed of three different goods from 20102012.
2010
2011
2012
Good
Price ($)
Quantity
Price ($)
Quantity
Price ($)
Quantity
A
12
10
16
8
22
4
B
5
18
3
30
4
25
C
1
10
2
5
5
10
a. For 2010, 2011, and 2012, determine the amount that a typical consumer pays each year to purchase the quantities listed in the table above.
Instructions: Round your answers to the nearest whole number.
Instructions: Round your answers to two decimal places.
b. The percentage change in the amount the consumer paid is % from 2010 to 2011, and % from 2011 to 2012.
c. It is problematic to use your answers to part b as a measure of inflation because (Click to select)only price is changingboth price and consumption are changingonly income is changingonly consumption is changing.
Instructions: Round your answers to two decimal places.
d. Suppose we take 2010 as the base year, which implies that the market basket is fixed at 2010 consumption levels. Using 2010 consumption levels, the rate of inflation is% from 2010 to 2011, and % from 2011 to 2012.
Instructions: Round your answers to two decimal places.
e. Repeat the exercise from part d, now assuming that the base year is 2011. Using 2011 consumption levels, the rate of inflation is % from 2010 to 2011, and % from 2011 to 2012.
f. Your answers from parts d and e were different because (Click to select)the base years put different weights on the goodsthe base years have the same consumption quantitiesincome has changedprices have changed.
cant figure out D orE
2010
2011
2012
Good
Price ($)
Quantity
Price ($)
Quantity
Price ($)
Quantity
A
12
10
16
8
22
4
B
5
18
3
30
4
25
C
1
10
2
5
5
10
Explanation / Answer
a) 2010 = 220
2011 = 228
2012 = 238
B) 2010-2011 = 3.5%
2011- 2012 = 4.2%
C) This data must be caclulated differently to calculate inflation
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