(a) Explain briefly the steps in the construction of consumer price index number. (b) The workers of agriculture Farm claim that there has been significant increase in the cost of living in there locality in the last two years hence they wish to be awarded a pay increase. They have further provided the management with the following data showing prices and weights of five important basic commodities. Calculate the aggregate price index. Commodity weight Year 2017 Year 2019 Price A 2 20 27 B 2 30 43 C 4 10 15 D 5 15 23 E 3 22 25

(a) Explain briefly the steps in the construction of consumer price index number. (b) The workers of agriculture Farm claim that there has been significant increase in the cost of living in there locality in the last two years hence they wish to be awarded a pay increase. They have further provided the management with the following data showing prices and weights of five important basic commodities. Calculate the aggregate price index. Commodity weight Year 2017 Year 2019 Price A 2 20 27 B 2 30 43 C 4 10 15 D 5 15 23 E 3 22 25

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 5SCQ: How to Measure Changes in the Cost of Living introduced a number of different price indices. Which...

See similar textbooks

Similar questions

The table given below reports the price of soda over four consecutive years.Table 5.7 Price Data Year Base-Year Soda Price Current Soda Price 1 (base year) $0.30 $0.30 2 $0.30 $0.45 3 $0.30 $0.55 4 $0.30 $0.65 Refer to Table 5.7. Compute the price index for the third year. Group of answer choices 100 150 130 118 183
Question 6 If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $11,000 to purchase those identical goods in 2015, then the price index for 2015 is a (10000/11000)*100=90.9. b) 100. c) (11000/10000)*100=110. d) unknown given this data.
Using the information below, what is the Gross Value Added at Market Price? Output Sold 800 Price per unit of output 20 Import Duty 400 Net change in stock -500 Intermediate Consumption 8000 a. 7900 b. 6500 c. 2100 d. 7500
13. Which of these statements regarding Consumer Price Index (CPI) are accurate? Select all that apply. A. The CPI can be computed for one industry or for the entire economy. B. CPI does not take into account a product's share of market sales when determining inflation for an entire economy. C. To figure out the current CPI, you first have to figure out the CPI for the base year. D. Inflation is the change in CPI.
Please no written by hand and no emage Fruit prices and the amounts consumed for 2010 and 2018 are shown. Use 2010 as the base. 2010 2018 Fruit Price Quantity Price Quantity Bananas (pound) $ 0.27 100 $ 0.30 110 Grapefruit (each) 0.26 50 0.63 53 Apples (pound) 0.34 85 0.49 85 Strawberries (basket) 1.01 8 2.47 11 Oranges (bag) 0.91 6 1.23 9 a. Determine the simple price indexes. (Round your answers to 2 decimal places.)Bananas,Grapefruit,Apples,Strawberries,Oranges b. Determine the simple aggregate price index for the two years. (Round your answer to 2 decimal places.)c. Determine the Laspeyres price index. (Round your answer to 2 decimal places.)d. Determine the Paasche price index. (Round your answer to 2 decimal places.)e. Determine Fisher's ideal index. (Round your answer to 2 decimal places.)
A basket of goods in 2005 costs $625; the same basket of goods cost $800 in 2010.What is the percentage change in the price level between 2005 and 2010? Question 7Answer a. -21.875% b. 28% c. 55% d. 0%
The ticket price index equals 270 in 2010. a) What was the overall inflation rate for ticket prices in the intervals 1977-1982, 1982-1997, and 1997-2010?b) Avatar earned $760,507,625 since its release, most of which over the course of 2010. It self-proclaimed itself as the all-time box-office champion. Determine the total value of gross revenues for Star Wars when evaluated at 2010 dollars. Do you still think that Avatar should be regarded as the box office champion? Explain.
From the data calculate the NDP at FC. Wages and salaries are 700 dollars, rent 100 dollars, depreciation $50, subsidies $100.
Calculate a new consumer price index for the data in the following exhibit. Assume that current-year prices of Twinkies, fuel oil, and internet are $0.95/package, $1.25/gallon, and $15.00/month, respectively. Calculate the current year’s cost of the market basket and the value of the current year’s price index. What is this year’s percentage change in the price level compared to the base year? Product (1) Quantity in Market Basket (2) Prices in Base Year Twinkies 365 packages $ 0.89/package Fuel oil 500 gallons 1.00/gallon Internet 12 months 30.00/month
6. Average nominal wages are higher in large cities than small cities. This is consistent withA. Large cities are more productive.B. Large cities are more skilled.C. Wages aside, large cities are less attractive places to live.D. All of the above.
Assume you make $15 an hour. In the last year the Consumer Price Index (CPI) rose from 280 to 310. What would your hourly wage need to be in order to compensate for inflation? Question 30 options: a) $17.30 b) $18.25 c) $15.84 d) $16.61
Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period. Seafood 2000Qty. (lb) 2000Price ($/lb) 2009Price ($/lb) Halibut 75,290 2.01 2.33 Lobster 83,080 3.62 3.09 Tuna 50,779 1.87 1.97 (a) Compute a price relative for each type of seafood. (Round your answers to one decimal place.) Seafood Price Relative Halibut ? Lobster ? Tuna ? (b) Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.) I2009 = ?? Comment on the change in seafood prices over the nine-year period. (Enter your percentage as a positive value. Round your answer to one decimal place.) Seafood prices have Up/down by ? % over the 9-year period according to the index.