Inflation/CPI Calculations (version A)
|
Base Year (2006) 2013
|
|
Product
|
Quantity
|
Price
|
Price
|
|
Cokes
|
100
|
$0.50
|
$0.75
|
|
Hamburgers
|
200
|
2.00
|
2.50
|
|
CDs
|
10
|
20.00
|
21.00
|
1) Refer to table above. Assume the market basket for the consumer price index has three products: Cokes, hamburgers, and CDs.
The Consumer Price Index for 2013 equals ______.
|
Product
|
Quantity
|
Base Year Price (2001)
|
Price (2012)
|
Price (2013)
|
|
Burritos
|
10
|
$1.00
|
$1.50
|
$1.75
|
|
Flashlights
|
15
|
5.00
|
7.00
|
6.75
|
|
Golf balls
|
8
|
2.00
|
3.00
|
3.50
|
2) Refer to table above. Consider a simple economy that produces only three products: burritos, flashlights, and golf balls. Use the information in the table to calculate the inflation rate for 2013 (vs. 2012), as measured by the consumer price index.
|
Year
|
Nominal Average
Hourly Earnings
|
CPI
|
|
2011
|
$10
|
100
|
|
2012
|
10
|
105
|
|
2013
|
12
|
110
|
3) Refer to table above. Real average hourly earnings were equal to ________ in 2012.
4) Looking at the table above, real average hourly earnings between 2012 and 2013 changed by ______%.
5) Matt's real wage in 2014 is $26.80. If the price level is 104, what is Matt's nominal wage?