NAME: Homework #3 Total Points: 20 1. Please use the information contained in the table below to answer the questions that follow: Commodity Prices 2000 2016 10 12 8 8 5 6 4 4 Quantities 2000 2016 20 22 16 18 10 11 7 8 B D a. What is the relative change in price for each of the four commodities? (Hint: you need to calculate the price relative for each of the commodities? b. Interpret each of the four values that you calculated in part a. c. Now use the price relatives you calculated for each commodity to calculate an average of price relatives' price index. What does the value you calculated mean? (Hint: just use the average of price relatives, you do not need to weight each commodity yet) d. Now you would like to instead weight the commodities based on their relative quantities as listed in the table above. Please calculate the weighted Paashe index for the four commodities: e. Were the values you calculated in parts a-d nominal values or real values? The CPI for 2016 was 139 (with 2000-100), please fill in all blanks in the table below: Nominal Prices Real Prices Commodity 2000 2016 2000 2016 A B C D