\[\begin{array} { | l | c | c | c | c | } \hline \text { Item } & \begin{array} { c } \text { Quantity } \\ ( 2011 ) \end{array} & \text { Price (2011) } & \begin{array} { c } \text { Quantity } \\ ( 2012 ) \end{array} & \text { Price (2012) } \\ \hline \text { Magazines } & 400 & \$ 5.00 & 450 & \$ 4.50 \\ \hline \text { Movie tickets } & 50 & \$ 6.00 & 200 & \$ 8.00 \\ \hline \text { Pizzas } & 100 & \$ 10.00 & 120 & \$ 10.50 \\ \hline \end{array}\] The data in the table above shows the consumption by families in an economy. The year 2011 is the reference base period. -Based on the table above, the CPI for 2012 is

A) 98.5. B) 105.1. C) 102.5. D) 5.0 percent. E) 100. A) 98.5. B) 105.1. C) 102.5. D) 5.0 percent. E) 100.

\[\begin{array} { l c c c c } \text { Item } & \begin{array} { c } \text { Quantity } \\ \mathbf { ( 2 0 1 1 ) } \end{array} & \begin{array} { c } \text { Price } \\ \mathbf { ( 2 0 1 1 ) } \end{array} & \begin{array} { c } \text { Quantity } \\ \mathbf { ( 2 0 1 2 ) } \end{array} & \begin{array} { l } \text { Price } \\ \mathbf { ( 2 0 1 2 ) } \end{array} \\ \hline \text { Pens } & 400 & \$ 1.00 & 400 & \$ 1.02 \\ \text { CDs } & 200 & \$ 15.00 & 200 & \$ 15.90 \\ \hline \end{array}\] -Consumers in a country buy only two goods, pens and CDs. The prices and quantities purchased by urban households are in the table above. If 2011 is the reference base year, the cost of the CPI market basket in the base year is

A) $3,400. B) $3,408. C) $3,580. D) $3,508. E) $3,500. A) $3,400. B) $3,408. C) $3,580. D) $3,508. E) $3,500.

\[\begin{array} { | l | c | c | c | c | } \hline \text { Item } & \begin{array} { c } \text { Quantity } \\ ( 2011 ) \end{array} & \text { Price (2011) } & \begin{array} { c } \text { Quantity } \\ ( 2012 ) \end{array} & \text { Price (2012) } \\ \hline \text { Magazines } & 400 & \$ 5.00 & 450 & \$ 4.50 \\ \hline \text { Movie tickets } & 50 & \$ 6.00 & 200 & \$ 8.00 \\ \hline \text { Pizzas } & 100 & \$ 10.00 & 120 & \$ 10.50 \\ \hline \end{array}\] The data in the table above shows the consumption by families in an economy. The year 2011 is the reference base period. -Based on the table above, between 2011 and 2012, the inflation rate in this country was

A) -1.5 percent. B) 105.1 percent. C) 2.5 percent. D) 98.5 percent. E) -2.5 percent. A) -1.5 percent. B) 105.1 percent. C) 2.5 percent. D) 98.5 percent. E) -2.5 percent.

Exam 16: The Cpi and the Cost of Living

-The table above has information about the CPI, nominal wage rate, and nominal interest rate for the country of Syldavia for the years 2010 to 2012. The reference base year is 2010. The real interest rate in Syldavia during 2012 was

Free

(Multiple Choice)

4.7/5

(61)

Question 1

Correct Answer:

Verified

D

If a private wage contract is agreed upon with a cost of living adjustment such that wage hikes are equal to increases in the CPI,

Free

(Multiple Choice)

4.7/5

(78)

Question 2

Correct Answer:

Verified

C

Item Quantity Price Quantity (2011) Price Loaves of bread 20 \ 3.00 22 \ 4.00 Jugs of soda 20 \ 2.00 30 \ 1.50 -The table above gives the purchases of an average consumer in a small economy. (These consumers purchase only loaves of bread and jugs of soda.)Suppose 2010 is the reference base period. a. What quantities are in the CPI market basket? b. What is the cost of the CPI market basket using 2010 prices? c. What is the cost of the CPI market basket using 2011 prices? d. What is the CPI in 2011?

Free

(Essay)

4.8/5

(69)

Question 3

Correct Answer:

Verified

a. The quantities in the CPI market basket are the 2010 quantities because 2010 is the reference base period. So, the quantities are 20 loaves of bread and 20 jugs of soda.
b. The cost of the CPI basket using 2010 prices is (20 loaves × $3)+ (20 jugs × $2)= $100.
c. The cost of the CPI basket using 2011 prices is (20 loaves × $4)+ (20 jugs × $1.50)= $110. Note that the quantities used in this calculation are the quantities in the CPI market basket.
d. The CPI in 2011 equals 100 multiplied by the cost of the CPI market basket at 2011 prices divided by the cost of the CPI basket at 2010 (base period)prices. The CPI equals 100 × ($110)/($100)= 110.

Item Quantity (2011) Price (2011) Quantity (2012) Price (2012) Magazines 400 \ 5.00 450 \ 4.50 Movie tickets 50 \ 6.00 200 \ 8.00 Pizzas 100 \ 10.00 120 \ 10.50 The data in the table above shows the consumption by families in an economy. The year 2011 is the reference base period. -Based on the table above, the CPI for 2012 is

(Multiple Choice)

4.8/5

(82)

Question 4

If prices have decreased since the base period, then

(Multiple Choice)

4.9/5

(81)

Question 5

Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110. Then, inflation is

(Multiple Choice)

4.7/5

(81)

Question 6

Item Quantity Price Quantity Price Pens 400 \ 1.00 400 \ 1.02 CDs 200 \ 15.00 200 \ 15.90 -Consumers in a country buy only two goods, pens and CDs. The prices and quantities purchased by urban households are in the table above. If 2011 is the reference base year, the cost of the CPI market basket in the base year is

(Multiple Choice)

4.9/5

(75)

Question 7

In 2008, the nominal minimum wage rate was $7.25 an hour and the CPI was 200. The real minimum wage rate in 2008 was

(Multiple Choice)

5.0/5

(80)

Question 8

The real interest rate equals the

(Multiple Choice)

4.8/5

(80)

Question 9

Which of the following statements about the nominal and the real wage rates is correct?

(Multiple Choice)

4.9/5

(68)

Question 10

In 2013, the reference base period for the CPI for the nation of Wobet, a typical consumer spent $30 on potatoes and $150 on steak. Which of the following is true?

(Multiple Choice)

4.8/5

(86)

Question 11

The Consumer Price Index (CPI)measures

(Multiple Choice)

4.8/5

(93)

Question 12

Explain how the real interest rate could be negative and how this situation would benefit the borrower.

(Essay)

4.9/5

(83)

Question 13

Which of the following formulas would you use to calculate the nominal wage rate?

(Multiple Choice)

5.0/5

(90)

Question 14

During 1990, a Hershey candy bar cost $.85. By 2007, the same Hershey candy bar cost $1.25. If the CPI was 130.7 in 1990 and 180.5 in 2007, the price of the 1990 Hershey candy bar in 2007 prices is

(Multiple Choice)

4.8/5

(83)

Question 15

Item Quantity (2011) Price (2011) Quantity (2012) Price (2012) Magazines 400 \ 5.00 450 \ 4.50 Movie tickets 50 \ 6.00 200 \ 8.00 Pizzas 100 \ 10.00 120 \ 10.50 The data in the table above shows the consumption by families in an economy. The year 2011 is the reference base period. -Based on the table above, between 2011 and 2012, the inflation rate in this country was

(Multiple Choice)

4.8/5

(77)

Question 16

The CPI is calculated by the Bureau of Labor Statistics on a frequency of every

(Multiple Choice)

4.8/5

(83)

Question 17

The bias in the CPI distorts private contracts because

(Multiple Choice)

4.9/5

(82)

Question 18

To measure the CPI, the BLS economic assistants check the prices of

(Multiple Choice)

4.7/5

(79)

Question 19

The CPI overstates inflation because the average consumer buys

(Multiple Choice)

4.9/5

(72)

Question 20

-The table above has information about the CPI, nominal wage rate, and nominal interest rate for the country of Syldavia for the years 2010 to 2012. The reference base year is 2010. The real interest rate in Syldavia during 2012 was

If a private wage contract is agreed upon with a cost of living adjustment such that wage hikes are equal to increases in the CPI,

If prices have decreased since the base period, then

Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110. Then, inflation is

In 2008, the nominal minimum wage rate was $7.25 an hour and the CPI was 200. The real minimum wage rate in 2008 was

The real interest rate equals the

Which of the following statements about the nominal and the real wage rates is correct?

In 2013, the reference base period for the CPI for the nation of Wobet, a typical consumer spent $30 on potatoes and $150 on steak. Which of the following is true?

The Consumer Price Index (CPI)measures

Explain how the real interest rate could be negative and how this situation would benefit the borrower.

Which of the following formulas would you use to calculate the nominal wage rate?

During 1990, a Hershey candy bar cost $.85. By 2007, the same Hershey candy bar cost $1.25. If the CPI was 130.7 in 1990 and 180.5 in 2007, the price of the 1990 Hershey candy bar in 2007 prices is

The CPI is calculated by the Bureau of Labor Statistics on a frequency of every

The bias in the CPI distorts private contracts because

To measure the CPI, the BLS economic assistants check the prices of

The CPI overstates inflation because the average consumer buys

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters