Suppose that people consume only three goods, as shown in this table: Tennis Balls Golr Balls Bottles of Gatorade 2020 Price $2 $4 $2 Quantity 100 100 200 2021 Price $2 $6 $3 Quantity 100 100 200 Complete the following table by computing the percantage change in price for each of the three goods. Tennis Balls Gelf Balls Bottles of Gatorade Percentage Change Using a method similer ta that used to calculate the consumer price index, the percentage change in the overall price level is| True or False: If you were to leam that a bottie of Gatorade increased in size from 2020 to 2021, that information would raise your estimation of the inflation rate. O True O False True or False: if you were to leam that Gatorade introduced new flavors in 2021, that would imply that the inflation rate you estimated is understated. O True O Palse
Suppose that people consume only three goods, as shown in this table: Tennis Balls Golr Balls Bottles of Gatorade 2020 Price $2 $4 $2 Quantity 100 100 200 2021 Price $2 $6 $3 Quantity 100 100 200 Complete the following table by computing the percantage change in price for each of the three goods. Tennis Balls Gelf Balls Bottles of Gatorade Percentage Change Using a method similer ta that used to calculate the consumer price index, the percentage change in the overall price level is| True or False: If you were to leam that a bottie of Gatorade increased in size from 2020 to 2021, that information would raise your estimation of the inflation rate. O True O False True or False: if you were to leam that Gatorade introduced new flavors in 2021, that would imply that the inflation rate you estimated is understated. O True O Palse
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 10P
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Transcribed Image Text:Suppose that people consume only three goods, as shown in this table:
Tennis Balls Golf Balls Bottles of Gatorade
2020
Price
$2
$4
$2
Quantity
100
100
200
2021
Price
$2
$6
$3
Quantity
100
100
200
Complete the following table by computing the percentage change in price for each of the three goods.
Tennis Balls Golf Balls
Bottles of Gatorade
Percentage Change
Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is
True or False: If you were to leam that a bottle of Gatorade increased in size from 2020 to 2021, that information would raise your estimation of the
inflation rate.
O True
O False
True or False: If you were to leam that Gatorade introduced new flavors in 2021, that would imply that the inflation rate you estimated is understated.
O True
O False
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