A Consumer Expenditure Survey in the city of Firestorm shows that people buy only firecrackers and bandages. A Consumer Expenditure Survey in 2016 shows that the average household spent $7878 on firecrackers and $1414 on bandages. In 2016, the reference base year, the price of a firecracker was $11, and the price of bandages was $22 a pack. In the current year, 2017, firecrackers are $33 each and bandages are $22 a pack. Calculate the CPI market basket and the percentage of a household's budget spent on firecrackers in the base year.
A Consumer Expenditure Survey in the city of Firestorm shows that people buy only firecrackers and bandages. A Consumer Expenditure Survey in 2016 shows that the average household spent $7878 on firecrackers and $1414 on bandages. In 2016, the reference base year, the price of a firecracker was $11, and the price of bandages was $22 a pack. In the current year, 2017, firecrackers are $33 each and bandages are $22 a pack. Calculate the CPI market basket and the percentage of a household's budget spent on firecrackers in the base year.
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Measuring A Nation's Income
Section: Chapter Questions
Problem 7QR
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A Consumer Expenditure Survey in the city of Firestorm shows that people buy only firecrackers and bandages.
A Consumer Expenditure Survey in 2016 shows that the average household spent
$7878
on firecrackers and
$1414
on bandages.In 2016, the reference base year, the price of a firecracker was
$11,
and the price of bandages was
$22
a pack.In the current year, 2017, firecrackers are
$33
each and bandages are
$22
a pack.Calculate the CPI market basket and the percentage of a household's budget spent on firecrackers in the base year.
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