<p>Suppose that people consume only three goods, as shown in this table:</p> <p>
ID: 1248966 • Letter: #
Question
<p>Suppose that people consume only three goods, as shown in this table:</p><p>                     Tennis Balls           Golf Balls           Bottle of Gatorade</p>
<p>2009 price          $2                          $4                          $1                                                                                      2009 quantity     100                       100                        200                                                                                      2010 price          $2                          $6                          $2                                                                                      2010 quantity     100                        100                       200</p>
<p> </p>
<p>a. What is the percentage change in the price of each of the three goods?</p>
<p>b. Using a method similar to the consumer price index, compute the percentage change in the overall price level.</p>
<p>c. If you were to learn that a bottle of Gatorade increased in size from 2009 to 2010, should that information affect your calculation of the inflation rate? If so, how?</p>
Explanation / Answer
If you can fix this chart, then this should be a fairly easy problem to solve. Fix the chart and Ill be able to help.
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