P Take a Test Carla Hepburn Google Chrome https:// 136670024¢erwin; yes Carl
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P Take a Test Carla Hepburn Google Chrome https:// 136670024¢erwin; yes Carla Hepburn & 7/5/16 5:08 PM ECO 2013 Summer B2016 TR 8am Quiz QUIZ 2 GDP and Unemployment Time Remaining: 01:08:16 Submit Quiz This Question 1 pt This Quiz: 20 pts possible 2 of 20 (8 complete) In 1972, the price of a Big Mac was $0.50. Use the information in the table below to find the price of a Big Mac in 2006 dollars. Year CPI 1972 41.8 201.6 2006 Source: Bureau of Labor Statistics. Base year 1962-84. The value of a 1972 Big Mac in 2006 dollars is (Round your answer to two decimal places.) The actual price of a Big Mac in 2006 was approximately $2.99. Thus the price of Big Macs has risen Y the cost of living. H III Vi Vi I. (LI) More Enter your answer in the answer box.Explanation / Answer
(a) Value of 1972 Mac in 2006 dollars = Price in 1972 x (CPI in 2006 / CPI in 1972)
= $0.5 x (201.6 / 41.8)
= $2.41
(b) Price of Big Mac has risen faster than (higher than) the cost of living.
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