Exam 11: Measuring the Cost of Living

In 1974, one could buy a theater for $1.25. Today the same theater ticket costs $6.50. Which pair of CPIs would imply that the cost in today's dollars was the same for both tickets?

The CPI was 172 in 2007, and the CPI was 46.5 in 1982. If your parents put aside $1,000 for you in 1982, then how much would you have needed in 2007 in order to buy what you could have bought with the $1,000 in 1982?

Which of the following is not correct?

In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007. A hamburger cost $5 in 2006 and $6 in 2007. Which of the following statements is correct?

Henri earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 in 2001 and 265.5 in 2006. Henri's 2006 salary in 2001 dollars is

If the nominal interest rate is 1.5 percent and the rate of inflation is -0.5 percent, then the real interest rate is

The Bureau of Labor Statistics is part of the U.S. Department of Labor.

If 2002 is the base year, then the inflation rate in 2005 equals

Table 11-12. Will's expenditures on food for three consecutive years, along with other values, are presented in the table below. -Refer to Table 11-12. Suppose Will's 2009 food expenditures in 2011 dollars amount to $5,750. Then x, the consumer price index for 2011, has a value of

List the three major problems in using the CPI as a measure of the cost of living.

Table 11-6. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. Year Priee of hamburegers Prife of hat doges 2009 \ 5.00 \ 3.00 2010 5.50 3.30 2011 5.61 3.63 -Refer to Table 11-6. Which of the following scenarios is consistent with this statement? "The cost of living increased by 25 percent between 2009 and 2011."

Which of the following is correct?

The U.S. income tax system is completely indexed for inflation.

In 1972, one could buy a bag of chips, a pound of hamburger, a package of buns, and a small bag of charcoal for about $2.50. If the same goods today cost $6.00, then which pair of CPIs would make the cost in today's dollars the same for both years?

The consumer price index was 200 in 2008 and 190 in 2009. The nominal interest rate during this period was 4.5 percent. What was the real interest rate during this period?

Scenario 11-2 The price tag on a golf ball in 1975 read $0.20, and the price tag on a golf ball in 2005 read $2.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3. -Refer to Scenario 11-2. In 1975 dollars, a 1975 golf ball cost $0.20 and a 2005 golf ball cost

If the price index was 90 in year 1, 100 in year 2, and 95 in year 3, then the economy experienced

Scenario 11-4 Quinn has job offers in Wrexington and across the country in Charlieville. The Wrexington job would pay a salary of $50,000 per year, and the Charlieville job would pay a salary of $40,000 per year. The CPI in Wrexington is 150, and the CPI in Charlieville is 90. -Refer to Scenario 11-4. The Wrexington salary in Charlieville dollars is

Table 11-4 The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. Year Price of Meat Price of a Tryy 2004 \ 3 per pound \ 2 2005 \ 1 per pound \ 7 2006 \ 4 per pound \ 5 -Refer to Table 11-4. The cost of the basket

A decrease in the price of domestically produced nuclear reactors will be reflected in