Suppose a Consumer Buys 10 Units of Good X and 20

question 75

Essay

Suppose a consumer buys 10 units of good X and 20 units of good Y every year.The following table lists the prices of goods X and Y in the years 2005-2007.Assume that these two goods constitute the typical market basket.Calculate the price indices for these years with 2005 as the base year.Comment on the inflation picture for these years. $$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Good } \mathbf { X } & \text { Good } Y \\\hline 2005 & \$ 3 & \$ 6 \\\hline 2006 & 4 & 7 \\\hline 2007 & 4.5 & 7.5 \\\hline\end{array}$$

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Definitions:

Analog Potentiometer

An electrical component that varies resistance in a circuit to control a device, often used to adjust levels such as volume.

Hall-effect TPS

A throttle position sensor using the Hall-effect principle to measure the position of the throttle in an engine, translating the throttle's position into an electrical signal.

Transmitting Torque

The process of transferring rotational force from one part of a mechanical system to another, typically via gears, belts, or shafts.

Planetary Gears

A gear system that consists of one or more outer gears revolving around a central sun gear, widely used in automatic transmissions.