6. Residents of a small town spend all of their income on corn, potatoes, and tomatoes. In 2020 the town spends $400 for 400 ears of corn, $750 for 1000 pounds of potatoes, and $350 for 600 tomatoes. In 2021, the town spends $450 for 375 ears of corn, $800 for 1100 pounds of potatoes, and $600 for 600 tomatoes. Calculate the price of 1 unit of each type of produce in each year. Use 2020 as the base year. Calculate the CPI in each year. What is the inflation rate from 2020 to 2021?

6. Residents of a small town spend all of their income on corn, potatoes, and tomatoes. In 2020 the town spends $400 for 400 ears of corn, $750 for 1000 pounds of potatoes, and $350 for 600 tomatoes. In 2021, the town spends $450 for 375 ears of corn, $800 for 1100 pounds of potatoes, and $600 for 600 tomatoes. Calculate the price of 1 unit of each type of produce in each year. Use 2020 as the base year. Calculate the CPI in each year. What is the inflation rate from 2020 to 2021?

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: Measuring The Cost Of Living

Section: Chapter Questions

Problem 2PA

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