-The Tables Above Give the Purchases of an Average Consumer

question 343

Essay

$$\begin{array} { | l | c | c | } \hline { \text { Item } } & \begin{array} { l } \text { Quantity } \\( 2010 )\end{array} & \begin{array} { l } \text { Price } \\( 2010 )\end{array} \\\hline \text { Shampoo } & 25 & \$ 2.35 \\\hline \text { Pizza } & 15 & \$ 7.50 \\\hline\end{array}$$
$$\begin{array} { | l | c | c | } \hline { \text { Item } } & \begin{array} { l } \text { Quantity } \\( 2010 )\end{array} & \begin{array} { l } \text { Price } \\( 2011 )\end{array} \\\hline \text { Shampoo } & 25 & \$ 2.50 \\\hline \text { Pizza } & 15 & \$ 7.75 \\\hline\end{array}$$
-The tables above give the purchases of an average consumer in a small economy. These consumers purchase only shampoo and pizza.) Suppose 2010 is the reference base period.
a) What is the cost of the CPI basket in 2010 and 2011?
b) What is the CPI in 2010 and in 2011?
c) What is the inflation rate between 2010 and 2011?

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Definitions:

Contract Was Formed

A statement indicating that an agreement meeting all legal requirements for enforceability (offer, acceptance, consideration) has been successfully established between parties.

Consideration Requirement

A fundamental principle in contract law that requires both parties involved in a contract to exchange something of value for the agreement to be legally binding.

Legal Value

Consideration or a benefit recognized by the law that supports a contract's enforceability.

Steinberg v. U.S.

A legal case reference, implying a specific instance of jurisprudence or legal interpretation by the court.