# Suppose the price of hot dogs in years 1, 2, and 3 is $1, $2, $3. The price of veggie burgers is...

## Question:

Suppose the price of hot dogs in years 1, 2, and 3 is $1, $2, $3. The price of veggie burgers is $2, $3, $4 for those years. The basket of goods is 4 hot dogs and 2 veggie burgers.

Compute the cost of the basket for the first year.

## Consumer Price Index (CPI):

In the context of finance, the concept of the consumer price index (CPI) is used to determine the weighted average value of a basket of goods and services consumed in a given economy. One can figure out the inflation rate by calculating the percentage change in the value of the CPI.

## Answer and Explanation: 1

Become a Study.com member to unlock this answer! Create your account

View this answerThe calculated cost of the basket for the first year is **$8**.

The cost of the basket for the first year is given by:

{eq}\begin{align*} &=...

See full answer below.

#### Ask a question

Our experts can answer your tough homework and study questions.

Ask a question Ask a question#### Search Answers

#### Learn more about this topic:

from

Chapter 5 / Lesson 1Learn the consumer price index definition and understand how to calculate consumer price index correctly. Study cost of living vs. inflation examples.

#### Related to this Question

- a. Suppose the price of hotdogs in years 1, 2, and 3 is $1, $2, and $3. The price of veggie burgers is $2, $3, and $4 for those years. The basket of goods is 4 hot dogs and 2 veggie burgers. Compute the cost of the basket for the first year. b. compute th
- Assume two markets: Pizza = Q_s = 5 + 8 P_p Q_d = 10 - .2 P_p + P_h Hamburger = Q_S 20 + P_h Q_d = 40 - 3 P_h +2 P_p Required: Find the price of pizza and hamburger that clears both markets at the same time.
- Assume a research firm collects survey sales data that reveal the relationship between the possible selling prices of hamburgers and the quantity of hamburgers consumers would purchase per year at alternative prices. The report states that if the price of
- Assume a research firm collects survey sales data that reveals the relationship between the possible selling prices of hamburgers and the quantity of hamburgers consumers would purchase per year at alternative prices. The report states that if the price o
- The quantity of hamburgers that households are willing to purchase is predicted to fall if there is: a) a fall in the price of hot dogs. b) a rise in the price of onion rings. c) a rise in the price of hamburgers.
- Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $6.00. In year tw
- How can fast food chains keep charging such low prices for hamburgers, year after year (ie.$0.99), when the price of beef has skyrocketed, and money has inflated?
- A research firm collects survey sales data that reveals the relationship between the possible selling prices of hamburgers and the quantity of hamburgers consumers would purchase per year at alternative prices. The report states that if the price of a ham
- Base Year (2006) 2013 |Product |Quantity| Price| Price |Cokes |100| $0.50 |$0.75 |Hamburgers |200 |2.00 |2.50 |CDs |10 |20.00 |21.00 1) Refer to table above. Assume the market basket for the cons
- Assume that households consume only hotdogs and soda; the average household consumes 12 hotdogs and 20 bottles of soda. In 1995, a hot dog was $0.90 each and soda $0.50 each. In 2003, hotdog price wen
- Assume two markets: Pizza= Q_s = 5+8P_p, \ Q_d = 10 - 0.2P_p + P_h Hamburger= Q_s 20 + P_h, \ Q_d = 40 -3P_h + 2P_p Find the price of pizza and hamburger that clears both markets at the same time.
- Assume there is a Period 5 (Pd 5), and the price of a hamburger is now $4.25, the price of aspirin is $10.75, and the price of movies is $9.50. What is the total amount spent in Period 5 on this basket?
- Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $10.00. In year two, the
- Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $9.00. In year two, the p
- Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $9.00. In year two, the price of the same basket is $8.00. From year one to year
- Suppose that the bundle used for the CPI consisted of the following items: 1 Apple 1 Banana 1 Carrot 1 Eggplant Suppose that the prices for these items in various years are given below: Compute the CP
- Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of coffee, one donut, and one newspaper. In year one, the basket costs $9.00. In year two, the price of the same basket is $8.00. From year one to ye
- Using the information below, find the price index for year 2. YEAR 1: BASE YEAR 3 chickens @ $.95 each = $2.85 5 lbs hamburger @ $.93 a lb = $1.95 2 kilowatts of electricity @ $5.3 a kilowatt = $10.6 16 gallons of gasoline @ $.6 a gallon = $9.6 1 de
- Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 500 million pounds per year. Suppose that the Centers for Disease Control (CDC) ann
- Suppose that the average sawtimber stumpage price is now $350/mbf. a. If, over the next 20 years these stumpage prices increase at a real rate of 1% per year, what will the real stumpage price be in 2
- Below is data from the Lazy R Ranch on its production and price of meats and poultry. For the years 2014 1nd 2015. Quantities 2014 Price per lb 2014 Price per lb 2015 Beef 235,000 3.49 3.79 Lamb 125,0
- Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 300 million pounds per year. Suppose that the Centers for Disease Control (CDC) ann
- Suppose you want to calculate a university price index (UPI). Let's keep things simple and assume that a typical student buys seven textbooks, nine pizzas, and twelve six-packs of beer in a year. The table below shows this market basket and the price of e
- The table below lists the per pound prices of meat and potatoes for the month of January, February, and March. Assume that the typical consumer buys 25 pounds of meat and 15 pounds of potatoes each mo
- A market basket is made up of three goods, 10X, 12Y, and 18Z. The prices in the base year are $1.20, $2.10, and $3.25, respectively. The prices in the current year are $1.44, $2.23, and $3.88. What is
- Suppose the price index is 110 and a typical basket of goods and services costs $3,300. What would this typical basket have cost in the base year? a) $30 b) $3,000 c) $3,630 d) not enough information to tell
- Assume that these fast food restaurants are now facing higher prices on the ingredients needed to produce their steak burger meals, and about the same time households in that area are finding it incre
- XYZ Hamburgers operates near a college campus. Stan of XYZ has been selling 120 hamburgers a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 240 hamburgers per day at $3.50 each. a. Calculate the price elastic
- Assume hamburgers and hot dogs are substitutes. A decrease in the price of hot dogs will cause a movement from A. point A to point B. B. point F to point G. C. D_2 to D_1. D. D_1 to D_2.
- Table 24-7. The table below applies to an economy with only two goods hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. Year Price of hamburgers Price of hot dogs 2009 $5 $3 2010 5.50 3.30 2011 5.61 3.63 I.) Refer to T
- Suppose a market basket consists of the following goods: 50 pens, 25 notepads, and 25 paperclips. Also assume the price per unit of these goods is as follows for the years noted and 2010 is the base year. Price in 2010, Price in 2011 Pens: $0.25, $0.30 No
- Rick sells hamburgers, facing no competition the demand for his burgers is: Q=1000-2P, where Q is the quantity of burgers sold per week and P is the price of a given hamburger. Suppose Rick's monthly
- You purchase a pizza oven that is expected to last 10 years for $15,000. How do you account for the economic cost of the oven? A. The cost is the price of the oven minus any revenue made selling pizzas made in the oven. B. Calculate the value of renting
- The table below shows the weekly supply for hamburgers in a market where there are just three sellers. Price Seller 1 Seller 2 Seller 3 $5 8 5 4 4 6 4 3 3 4 3 2 2 2 2 1 Refer to the above table. If the price of a hamburger falls from $5 to $4, then
- An individual consumes Hot-Dogs (H) and Burgers (B). His utility is given by U=H+B. If the price of a hot dog is $1 and the price of a burger is $2, then the individual will only eat hot dogs. True or
- Suppose robots(x1) and staff(x2) are needed to run a shop. Robots cost $21 p year while staff cost $49 per year. Also, robots can serve 7 customers an hour while staff can serve 4 customers per hour.
- Suppose that in 1984, the total output in a single-good economy was 10,000 buckets of chicken. Also assume that in 1984, each bucket of chicken was priced at $16. Finally, assume that in 2005, the price per bucket of chicken was $20 and 22,000 buckets wer
- Suppose the price of bagels in Allentown is currently $0.75 per bagel. There are 10 low-cost bakeries that can produce bagels, each of which has the supply function Qs = 200P - 100. There are 10 high-cost bakeries that can produce bagels, each of which ha
- Year ; Beer Produced ; Price of Beer ; Pizzas Produced ; Price of Pizza ; 2002 ; 80 ; $5.00 ; 40 ; $4.00 ; 2009 ; 90 ; $6.00 ; 60 ; $10.00 ; Consider the table above describing the economy of Pazzolan
- Suppose that one canister of Pringles costs 25 Pounds, Macadamia Nuts costs $5 per can, and that the relative price of Pringles in terms of Macadamia Nuts is 3 cans per canister. Calculate the following: a) The dollar-pound exchange rate, i.e. the price
- Suppose that in 1984 the total output in a single good economy was 7,000 buckets of chicken. Also, suppose that in 1984 each bucket of chicken was priced at $10. Finally, assume that in 2005 the price per bucket of chicken was $16 and that 22,000 buckets
- Suppose that in 1984 the total output in a single-good economy was 7000 buckets of chicken. Also suppose that in 1984 each bucket of chicken was priced at $10. Finally, assume that in 2005 the price per bucket of chicken was $16 and that 22,000 buckets we
- Suppose that people consume only three goods, as shown in this table Tennis Balls Golf Balls Gatorade 2009 price $2.00 $4.00 $1.00 quantity 100 100 200 2010 Price $2.00 $6.00 $2.00 quantity 100 100 200 Using 2009 as the base year, compute the CPI
- 3. Suppose we are studying the market for burgers. Bob is the sole provider of burgers in the market; he faces the following cost function: C(Q) = Q^2 + 9, and the following3. Suppose we are studying
- Suppose a country produces two final goods, Pizzas (Ps) and Tacos (Ts). In Year 1 it produced 10 Ps at a price of $5 each and 50 Ts at a price of $1 each. In Year 2 it produced 15 Ps at a price of $6
- Ashley is currently consuming 10 hot dogs and 8 hamburgers a week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers
- Suppose a consumer spends $48 on pizza and tacos per month. The price of pizza is $8 and the price of tacos is $2 per unit. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month is on the y-axis, which of the
- Suppose the price of bagels in Allentown is currently $1.05 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function low-cost bakery: Qs(low-cost) = 200P - 125 high-cost bakery: Q
- You can spend $10 for lunch, and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the price for cheeseburger has increased from $5 to $6, so you decide to purchase just one cheeseburger. This is best described as:
- The formula for computing a basic price index is: a. (cost of market basket in base year/cost of market basket today) times 100. b. (cost of market basket today/cost of market basket in base year) times 100. c. (100/cost of market basket in base year) + c
- Suppose that the following equation represents the annual household demand for broilers. Q = 160 - 25P_1 + 10P_2 + 0.001I where Q is the annual pounds of broilers P_1 is the price/lb of broilers P_2 is the price/lb of beef I is the annual income Calculate
- Suppose that the consumers buy 5 apples and 3 oranges every year (basket of goods), and the price of each one was showed as the following: || || 2012 || 2013 || 2014 | Apple | $2 |$3 | $4 | Orange
- The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and prices for the base year year 1 and in the following two years.
- 1. Assume that a rancher sells McDonalds a quarter-pound of meat for $1 and that McDonalds sells you a hamburger made from that meat for $2. What is the value included in GDP and why? 2. Assume that a
- Suppose that the basket of goods in the Consumer Price Index (CPI) consisted of 3 units of pork and 2 units of corn. What is the consumer price index for 2016 if the base year is 2015? a. 85 b. 100 c. 115 d. 175
- Suppose the price of a Big Mac hamburger is $3.06 in the United States and 10.5 yuan in China. Furthermore, suppose the nominal foreign exchange rate is 8.06 yuan per dollar. a) Calculate the real exc
- The monthly market basket for consumers consists of pizza, t-shirts, and rent. The table below shows market basket quantities and price for the base year (Year 1) and in the following year: (Round you
- The price of a hamburger is $1, the price of a movie is $5, and the consumer has $13. A consumer has purchased 3 hamburgers and two movies, receiving 10 units of utility for the last hamburger and 10
- The price of a hamburger is $1 and the price of a movie is $6 and the consumer has $14. A consumer has purchased 2 hamburgers and 2 movies, receiving 20 units of utility for the second hamburger and 1
- The price of a McDonald's hamburger in 1955 was $0.15 when the price index was 27. If, in 2011, it was $0.89 when the price index was 220, then the inflation-adjusted price of a McDonald's hamburger in 2011 was: A. a bit higher than 2011's actual price (
- Suppose an economy produces two products: meat pies and MP3s. In 2011, 20 meat pies were sold at $5 each, and eight MP3s were sold at $50 each. In 2010, the base year, the price of meat pies was $10 each, and the price of MP3s was $75 each. Therefore: A.
- Suppose, in the base year, a typical market basket purchased by an urban family cost $250. In Year 1, the same market basket cost $950. What is the consumer price index (CPI) for Year 1? If the same m
- Assume that the market basket contains 10X, 20Y, and 45Z. The current-year prices for goods X, Y, and Z are $1, $4, and $6, respectively. The base-year prices are $1, $3, and $5, respectively. What is the CPI in the current year?
- Record US bean crop up 24% is forecasted for the year. The USDA reported that world bean production will be 9.9% greater than last year's, while US bean production will be 24% larger. The price of beans is expected to be 46% higher than last year's price.
- The following table presents quantities and prices for four commodities for the years 1992 and 1993: Quantities Prices 1992 1993 1992 1993 Pies 80.0 100.0 1.20 1.25 Frozen Peas 4.0 5.0 1.60 1.65 Beer 240.0 180.0 1.00 1.1 1 Automobile 0.1 0.1 27000 28250 C
- You can only consume two goods: hamburgers and smoothies. The price of each hamburger is $2.00 and the price of each smoothie is $1.00 and you have only $11 dollars to spend. [TABLE] 1. How do you allocate your budget? (What would you buy first, second, .
- Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken and the price of each bucket of chicken was $10. In 2005 the price per bucket of chicken was $20 and 22,000
- Suppose you are given a monthly income of $200 to spend on food while at college. Further, suppose the price of a single-service pizza is $4 and the price of a deli sandwich is $2. Which one of the following consumption combinations is possible given the
- Pete can consume a total of 8 tacos and 0 hamburgers, or 0 tacos and 4 hamburgers for her weekly lunch consumption possibilities; the opportunity cost of one taco is: a. 1/2 hamburger, b. 1 hamburger, c. 2 hamburgers, d. 4 hamburgers, e. 8 hamburgers
- George has $14 to spend on hamburgers and sodas. The price of a hamburger is $6 and the price of a soda is $2. Fill in the information in the following table and find the equilibrium. Can you afford this combination? Quantity of Hamburgers TU from Hambur
- Suppose a consumer has an income I = $150 which he/she spends on pizza and tacos per month. The price of pizza is $20 and the price of tacos is $10. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month is on
- Suppose a consumer has an income I = $48 which he/she spends on pizza (x) and tacos per month (y). The price of pizza is $8 and the price of tacos is $2. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month i
- Calculate a price index for 2015, 2016, and 2017 using the following information about prices. Let the market basket consist of the price of one pizza pie, three sodas, and five caffe lattes. Let the year 2015 be the base year (with an index value of 100)
- C&A produces dog food in 5-pound bags. Monthly demand for C&A's dog food is 500 pounds. C&A has capacity to produce 2,000 5-pound bags per year. The setup cost to produce the dog food is $10. The holding cost is $1 per 5-pound bag per year. What is the ec
- Assume the current CPI (2018) is 252.439 and the CPI for 2009 is 215.969. Mark consumes apples. In the year 2009, red apples cost $1 each and green apples cost $2 each. In the year 2009, red apples cost $1 each and green apples cost $2 each. In the year 2
- The typical consumer's food basket in the base year 2015 is as follows: 30 chickens at $3 each 10 hams at $5 each 10 steaks at $8 each A chicken feed shortage causes the price of chickens to rise
- The typical consumer's food basket in the base year 2015 is as follows: 30 chickens at $2 each 10 hams at $6 each 10 steaks at $8 each A chicken feed shortage causes the price of chickens to rise
- At the meat counter of a local supermarket, two shoppers were overheard complaining about the high price of hamburgers. They concluded that the government should not allow the price of hamburgers to rise above $2.25 per pound. a. Do you think the shoppers
- A food truck operator originally produced hamburgers and hotdogs. To serve the tastes of their various customers, the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well. Since the new products were introduced, average costs r
- The current price floor in the agricultural lettuce market is $1 per head. The price floor makes it such that the price of lettuce is 25% higher than equilibrium price and 100 heads of lettuce are dem
- The prices and quantities for a typical family's weekly egg and bacon purchases in 1935 and 2018 are shown below. Use this data to calculate a Laspeyres price index for 2018, using 1935 as the base year.
- Suppose the price of coffee is $3 each, the price of bagels is $2 each, and a person's budget is $40. The relative price of coffee is A. 1.5 bagels. B. 2/3 of a bagel. C. 13.33 bagels. D. 20 bagels.
- Suppose in 2010 the cost of purchasing a basket of goods was $100. That same basket cost $250 in 2011. If 2010 is the base year, the consumer price index for 2011 is: A. 150. B. 250. C. 50. D. 100.
- Suppose that Marky has a utility function for two goods, hot dogs (H) and pizza slices (P), is U(H,P) = 3H + 4P The price of a hot dog is $1 and the price of a slice of pizza is a $2 per unit; and Ma
- The cost of the CPI basket in base-period prices is $200 and the cost of the CPI baskets in current-period prices is $450. The CPI in the current year is: a. 450 b. 44,44 c. 225 d. 300 e. 250
- A market basket is made up of three goods, 100X, 120Y, and 180Z. The prices in year one are $1.20, $2.10, and $3.25, respectively. The prices in year two are $1.44, $2.23, and $3.88. Assume year one to be the base year: The consumer price index in the ba
- Imagine you've started a new pizza restaurant. It costs you about $6 to produce a pizza. Last week you sold 500 pizzas for $12 each. This week you raised your price and sold 375 pizzas for $14 each. What price should you be charging?
- The market price of cheeseburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increa
- Assume that the price of a pizza is $15, the price of a compact disk is $15, and the price of a movie is $5. How many units of pizza will C. Chang consume if he spends all of his income of $90 a month on these three goods. a. two b. three c. four d. five
- Assume that the price of a pizza is $10, the price of a compact disk is $15, and the price of a movie is $5. How many units of pizza will C. Chang consume if he spends all of his income of $90 a month on these three goods? a. two b. three c. four d. five
- A budget line for Ralph showsaA budget line for Ralph shows his consumption choices between hot dogs on the vertical axis and hamburgers on the horizontal axis. If the price of hamburgers goes up, Wha
- The following graph shows the market for frozen hamburgers in Detroit. Suppose frozen hamburger sellers expect to sell next week's hamburgers for significantly less than today's price. Show the effect
- A budget constraint for Ralph shows his consumption choices between hot dogs (on the vertical axis) and hamburgers ( on the horizontal axis) if the price of hamburgers goes up it what will happen?
- A shepherd has the cost function c(y) = 4y^{2}, where y is the number of 10 pound bales she sells per month. She faces a competitive market for wool, with a price of $40 a bale. How many bales should
- You produce quesadillas (Q) with beef (B) and cheese (C). The production process is as so: Q = 40 B - 1.5 B^2 + 50 C - 1.5 C^2 The price of beef is $4 per box, and the price of cheese is $5 per box. The boxes are the same size and you only have room for 9
- A retail outlet for calculators sells 700 calculators per year. It costs $2 to store one calculator for a year. To reorder, there is a fixed cost of $7, plus $2.15 for each calculator. How many times
- Suppose a farmer planted 2,000 acres of squash, with an average yield of 40 squash an acre. Squash prices are $10/squash but are expected to fall. The producer can enter into a 4-month futures contract at a price of $9.50/squash. After 4 months, the produ
- You can spend $5 for lunch and you would like to have two double cheeseburgers. When you get to the restaurant, you find out the price for the double cheeseburger has increased from $2.50 to $2.99. You decide to have just one double cheeseburger for lunch