What would the value of the cpi be in year 1

Assignment Help Econometrics

Reference no: EM13192597

The consumption bundle and prices for years 0 and 1 for Sam are shown below:

Item Q0 P0 Q1 P1

Wine 45 $5.00 60 $3.50

Bread 120 $2.00 90 $2.50

a. Using the market basket in year 0 and setting the CPI for year 0 = 1.00, calculate the CPI for year 1

b. Graph the year 0 and year 1 budget constraints. Label the year 0 constraint A and the year 2 constraint B.

c. In which year was Sam better off? How can you tell?

d. Using the market basket in year 1 and pricing it out in year 0 and year 1 prices, what would the value of the CPI be in year 1? (assume the prices in year 0 are set = 1.00 for the CPI)

Reference no: EM13192597

Questions Cloud

The earth''s physical landscape : "The earth's physical landscape is the result of conflict between forces that build the land higher and those that wear it down" What this means?

How long will it take them working together : Computer A can a job in 4 hours. Computer B can do the same job in 2 hours. How long will it take them working together?

Determine the dimension of the page : a production manager decided that the pages of a book should have a 1 inc margin at the top and bottom and a 1/2 inch margin on each sides . and each page of the book should have an area of 50 inc^2. determine the dimension of the page that will r..

State what type of glassware would you use to measure : What type of glassware would you use to measure the volume of a .002035 M sodium nitrate

What would the value of the cpi be in year 1 : The consumption bundle and prices for years 0 and 1 for Sam are shown below: Item Q0 P0 Q1 P1 Wine 45 $5.00 60 $3.50 Bread 120 $2.00 90 $2.50 a. Using the market basket in year 0 and setting the CPI for year 0 = 1.00, calculate the CPI for year 1

Find a linear function : Find a Linear Function that F that expresses temperature Fahrenheit scale in terms of degrees Celsius C.

What is the largest area you can enclose : If you have 260 feet of fencing and want to enclose a rectangular area up against a long, straight wall, what is the largest area you can enclose?

Honorable response to the dilemmas of existence : Nietzsche argued that the most honorable response to the dilemmas of existence is to

Define what is the silver ion concentration in a solution : What is the silver ion concentration in a solution prepared by mixing 457 mL of 0.373 M silver nitrate with 475 mL of 0.442 M sodium phosphate?

User Account

All Pages