Price Indices and Real versus Nominal Values Fill in the blanks of this chart below… Quantity Unit in Spending in Unit price in Spending in Unit Price in Spending in bought in base year base year Year 1 Year 1 Year 2 Year 2 base year Whole Pizza 30 $5 $7 $9 Flash Drive 40 $6 $5 $4 Six-pack of 60 $1.50 $2 $2.50 soda Total -- How much would $100 of goods and services purchased in the base year cost in year 1? What was the percentage increase in prices in this case? What is the percentage increase in prices from the base year to Year 2? Constructing a Price Index Year 1 Year 2 Year 3 Cost of Cost of Cost of Basic Market Price per Price per Price per No. of units Market market market basket item unit unit unit Basket basket basket Cheese 2 lbs. $1.75 $3.50 $1.50 $3.00 $1.50 $3.00 Blue Jeans 2 pair $12 $24 $15.50 $31 $20 $40 Gasoline 10 gals. $1.25 $12.50 $1.60 $16 $2.70 $27 Total -- -- $40 -- $50 -- $70 4. If Year 1 is selected as the base year, calculate the index for each year. Be ready to explain your work…
Price Indices and Real versus Nominal Values Fill in the blanks of this chart below… Quantity bought in base year Unit in base year Spending in base year Unit price in Year 1 Spending in Year 1 Unit Price in Year 2 Spending in Year 2 Whole Pizza 30 $5 $7 $9 Flash Drive 40 $6 $5 $4 Six-pack of soda 60 $1.50 $2 $2.50 Total -- How much would $100 of goods and services purchased in the base year cost in year 1? What was the percentage increase in prices in this case? What is the percentage increase in prices from the base year to Year 2? Constructing a Price Index Year 1 Year 2 Year 3 Basic Market basket item No. of units Price per unit Cost of Market Basket Price per unit Cost of market basket Price per unit Cost of market basket Cheese 2 lbs. $1.75 $3.50 $1.50 $3.00 $1.50 $3.00 Blue Jeans 2 pair $12 $24 $15.50 $31 $20 $40 Gasoline 10 gals. $1.25 $12.50 $1.60 $16 $2.70 $27 Total -- -- $40 -- $50 -- $70 4. If Year 1 is selected as the base year, calculate the index for each year. Be ready to explain your work…
unit_2_learning_target_packet.docx