How might you construct measure of the change in price level

Reference no: EM13222112

Define inflation. Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2007, fish sold for $2.50 per pound, meat was $3.00 per pound, and fruit was $1.50 per pound. At the end of the year, you discover that the catch was low and that fish prices had increased to $5.00 per pound, but fruit prices stayed at $1.50 and meat prices had actually fallen to $2.00. Can you say what happened to the overall price level/How might you construct a measure of the change in the price
level? What additional information might you need to construct your measure?

Reference no: EM13222112

Questions Cloud

Find equilibrium locations by maximizing profit functions : Firms can now not only choose their prices but can also choose their location. This happens in two stages. In the first period, firms choose their locations and in the second period, they choose their prices. The transport cost of the consumer is ..

What are the labor requiremnt implication : In anticipation of the ad campaign describe above, management approved the purchase of 2 additional bronze machines. What are the labor requiremnt implication?

What effects would the philosophy have on size of federal : Is this measure stabilizing or destabilizing. Suppose all states were committed to a balanced budget philosophy and the economy moved into a recession. What effects would this philosophy have on the size of the federal deficit.

Describe how a written code of ethics might impact : Discuss the ethics of continuing to do business with this firm. In this discussion evaluate the economic, legal and ethical issues. Describe how a written code of ethics might impact your decision.

How might you construct measure of the change in price level : Define inflation. Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2007, fish sold for $2.50 per pound, meat was $3.00 per pound, and fruit was $1.50 per ..

Which of the following is a characteristic of the horizontal : Which of the following is a characteristic of the horizontal organization?

Discuss the process you would apply to determine : determine whether the procedure falls within the RN scope of practice and how you would go about introducing the new procedure with physicians and fellow nurses.

Define what type of market structure is the auto industry : Compare the automotive manufacturing industry today to the automotive manufacturing industry of the 1950's. Applying the economics of price and output, what is the difference between the industry of today and that of the 1950's.

User Account

All Pages