macro The table below shows the prices of basketball and baseball for couple of
ID: 1124417 • Letter: M
Question
macro
The table below shows the prices of basketball and baseball for couple of years Assume ine typical consumer's basket consists of 6 basketballs and 2 baseballs. Assume the typical consumer's Year 2013 2014 2015 Basketball $3.50 $4.00 $5.50 Baseball $3.25 $3.75 $4.10 Assuming 2013 as the base year, the inflation rate was 27.5 percenat in 2014 and 31.5 percent in 2015. 1454 percent in 2014 and 30.80 percent in 2015 31.5 Percent in 2014 and 41 2 percent in 2015. 11454 perceat in 2014 and 14982 percent in 2015Explanation / Answer
The right answer is option 2: 14.54% in 2014 and 30.80% in 2015
Explanation:
The value of the basket in 2013 was $3.5 * 6 + $3.25 * 2 = $21 + $6.5 = $27.5
The value of the basket in 2013 was $4 * 6 + $3.75 * 2 = $24 + $7.5 = $31.50
So, the inflation in 2014 = ($31.5 - $27.5)/$27.5 * 100 = 0.1454 * 100 = 14.54%
The value of the basket in 2013 was $5.50 * 6 + $4.10 * 2 = $33 + $8.20 = $41.20
So, the inflation in 2015 = ($41.20 - $31.50)/$31.50 * 100 = 0.308 * 100 = 30.8%
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