A typical consumer in Microtania has a market basket consisting of 5 Lemons and 4 Peaches. The data table below provides information on Microtania’s prices of Lemons and Peaches in 2011 and 2012.                                           2011   2012Price per unit of Lemons    $0.5    $0.7Price per unit of Peaches   $0.4     $1.2What was the cost of the market basket in 2011? What was the cost of the market basket in 2012? What was the inflation rate in Microtania between 2011 and 2012?

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.3P
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A typical consumer in Microtania has a market basket consisting of 5 Lemons and 4 Peaches. The data table below provides information on Microtania’s prices of Lemons and Peaches in 2011 and 2012.
                                           2011   2012
Price per unit of Lemons    $0.5    $0.7
Price per unit of Peaches   $0.4     $1.2
What was the cost of the market basket in 2011? 
What was the cost of the market basket in 2012? 
What was the inflation rate in Microtania between 2011 and 2012? 

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9781337517942
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NICHOLSON
Publisher:
Cengage