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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

A dozen eggs cost $0.88 in January 1980 and $2.11 in January 2015. The average wage for production workers was $7.58 per hour in January 1980 and $19.64 in January 2015.

a. By what percentage did the price of eggs rise?

b. By what percentage did the wage rise?

c. In each year, how many minutes did a worker have to work to earn enough to buy a dozen eggs?

d. Did workers’ purchasing power in terms of eggs rise or fall?

Subpart (a):

To determine

Measuring the changes in price, wages and purchasing power.

Explanation

Percentage rise in price is calculated as follows:

Percentage change in price =PricePresentPricePreviousPricePrevious×100=2

Subpart (b):

To determine

Measuring the changes in price, wages and purchasing power.

Subpart (c):

To determine

Measuring the changes in price, wages and purchasing power.

Subpart (d):

To determine

Measuring the changes in price, wages and purchasing power.

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