The Japanese Ministry of Internal Affairs and Communications collects data on the prices of goods and services
Question:
The Japanese Ministry of Internal Affairs and Communications collects data on the prices of goods and services in the Ku-area of Tokyo, as well as data on the average Japanese household’s monthly income. The accompanying table shows some of this data. (¥ denotes the Japanese currency the yen.)
a. For each of the two years for which you have data, what is the maximum number of packs of eggs that an average Japanese household could have consumed each month? The maximum number of 100-gram portions of tuna? In one diagram, draw the average Japanese household’s budget line in 2013 and in 2015. Place the quantity of eggs on the y-axis and the quantity of tuna on the x-axis.
b. Calculate the relative price of eggs in terms of tuna for each year. Use the relative price rule to determine how the average household’s consumption of eggs and tuna would have changed between 2013 and 2015.
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