Macroeconomics
13th Edition
ISBN: 9780134744452
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 5, Problem 8SPA
To determine
Determine the
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b. Covid 19 pandemic has force the people in the economy Love & Laughter, to consume only 2 goods, food and clothing. The CPI is derived from the market basket of goods which consists of 25 units of food and 5 units of clothing.FOOD Clothing2018 price per unit $8 $202019 price per unit $12 $40(i). What are the percentage increases in the price of food and in the price of clothing?(ii). What is the percentage increase in the CPI?(iii). Do these price changes affect all consumers to the same extent? Explain.
Covid 19 pandemic has forced the people in the economy Love & Laughter, to consume only 2 goods, food, and clothing. The CPI is derived from the market basket of goods which consists of 25 units of food and 5 units of clothing.
FOOD
Clothing
2018 price per unit
$8
$20
2019 price per unit
$12
$40
1. What are the percentage increases in the price of food and in the price of clothing?
2. What is the percentage increase in the CPI?
3. Do these price changes affect all consumers to the same extent? Explain.
The rent for tenants in a building in 1940 was $30 per month. The landlord changes the rent based on the CPI-U. Use the CPI-U chart below to calculate the current rent in 2005. Round to the nearest dollar.
Year
CPI-U
1940
14.0
1949
23.8
1983
99.6
2000
172.2
2005
195.3
2009
214.5
2014
236.0
2017
245.1
2019
255.7
2020
258.8
$
(b) Show calculations and explain your reasoning.
Chapter 5 Solutions
Macroeconomics
Ch. 5.1 - Prob. 1RQCh. 5.1 - Prob. 2RQCh. 5.1 - Prob. 3RQCh. 5.1 - Prob. 4RQCh. 5.1 - Prob. 5RQCh. 5.2 - Prob. 1RQCh. 5.2 - Prob. 2RQCh. 5.2 - Prob. 3RQCh. 5.2 - Prob. 4RQCh. 5.2 - Prob. 5RQ
Ch. 5.2 - Prob. 6RQCh. 5.2 - Prob. 7RQCh. 5.3 - Prob. 1RQCh. 5.3 - Prob. 2RQCh. 5.3 - Prob. 3RQCh. 5.3 - Prob. 4RQCh. 5.3 - Prob. 5RQCh. 5.3 - Prob. 6RQCh. 5 - Prob. 1SPACh. 5 - Prob. 2SPACh. 5 - Prob. 3SPACh. 5 - Prob. 4SPACh. 5 - Prob. 5SPACh. 5 - Prob. 6SPACh. 5 - Prob. 7SPACh. 5 - Prob. 8SPACh. 5 - Prob. 9SPACh. 5 - Prob. 10SPACh. 5 - Prob. 11SPACh. 5 - Prob. 12APACh. 5 - Prob. 13APACh. 5 - Prob. 14APACh. 5 - Prob. 15APACh. 5 - Prob. 16APACh. 5 - Prob. 17APACh. 5 - Prob. 18APACh. 5 - Prob. 19APACh. 5 - Prob. 20APACh. 5 - Prob. 21APACh. 5 - Prob. 22APACh. 5 - Prob. 23APACh. 5 - Prob. 24APACh. 5 - Prob. 25APACh. 5 - Prob. 26APACh. 5 - Prob. 27APACh. 5 - Prob. 28APACh. 5 - Prob. 29APA
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- While rooting through the attic, you discover a box of old tax forms. You find that your grandmother made $175 working part-time during December 1964, when the CPI was 31.3. How much would you need to have earned in December 2014, when the CPI was 234.8, to have at least as much real income as your grandmother did in 1964? Give your answer to two decimals.arrow_forwardThe people on Windy Island buy only juice and cloth. The CPI basket contains the quantities bought in 2019. The average household spent $600 on juice and $300 on cloth in 2019 when the price of juice was $4 a bottle and the price of cloth was $10 a yard. In 2021, juice is $8 a bottle and cloth is $12 a yard. Calculate the CPI in 2021. The CPI in 2021 is ____? >>>>Answer to 1 decimal placearrow_forwardThe table represents the economy of bonaadventure coffee is used to make cappuccinos and has no other use coffee makers and bean grinders I purchase by all entities as our a cappuccinos the government has determined that the average consumer purchases one coffee maker to Bing grinders and 1000 cappuccinos when necessary used 2019 as a base year A.Calculate the CPI for 2017 b.calculate the inflation for 2019 to 2020 c. calculate the real wage of someone earning $10 in 2020arrow_forward
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