What are the costs of the basket

Assignment Help Business Economics

Reference no: EM13984013

The following table shows the prices and quantities consumed in the country known as the United States. Suppose the base year is 1996. The fixed basket is determined by 1996 quantities. 1996 is also the base year.

Year Price of Books Quantity of Books Price of Pencils Quantity of Pencils

1996 $2 40 $5 100

1997 $4 50 $8 120

(a) What are the costs of the basket in 1996 and 1997?

(b) What are the values of the CPI in 1996 and 1997?

Reference no: EM13984013

Questions Cloud

Compute the life for this challenger having the lowest EUAC : In a replacement analysis problem, the following facts are known: initial cost ($12,000), the annual maintenance (none for the first 3 years, $2,000 at the end of the 4th year, $2,000 at the end of the 5th year, increasing $2,500 per year after the 5..

Consistent across time in classical theory : Discounting future utility is a widely accepted assumption in classical models of inters- temporal choice. Behavioral economics adds to our understanding of time discounting with observations of inconsistent inter-temporal choice. In what sense are i..

Calculate the monopolists profit : Suppose the demand curve for a monopolist is Q = 1000 − P, and the marginal revenue function is MR = 1000 − 2Q. The monopolist has a constant marginal and average total cost of $100 per unit. Find the monopolist’s profit-maximizing output and price. ..

The welfare loss and dead weight triangle depicts : The welfare loss/dead weight triangle depicts:

What are the costs of the basket : The following table shows the prices and quantities consumed in the country known as the United States. Suppose the base year is 1996. The fixed basket is determined by 1996 quantities. 1996 is also the base year. What are the costs of the basket in ..

Financial markets is that financial intermediaries : One of the basic facts of financial markets is that financial intermediaries, particularly banks, are the most important source of external funds used to finance business. Explain the reasons from what we learned in Chapter 8 from Money, Banking and ..

The daily demand for a product-standard deviation : The daily demand for a product is 17 units with a standard deviation of 2.6 units. The review period is 30 days with a lead time of 14 days. Management has a set policy of satisfying 95% of demand from items in stock. At the beginning of the review p..

Explain graphically how isoquant-isocost analysis : Explain graphically how isoquant-isocost analysis can be used to derive a long-run labor demand curve. Distinguish between the substitution and output effects. How might a wage differential between two regions be reduced via movements of capital to t..

Second best pricing : Assume the MTA’s production cost curve is given by C=1,200,000,000 + 3.5q where q denotes the number of subway trips. From past fare changes we know that a 20% drop in fares will increase the number of transit trips by 4%. Calculate the first-best tr..

User Account

All Pages