Suppose that the CulinaryLand BLS has determined that, based on its 2015 base year spending survey,...

Transcribed Image Text:

Suppose that the CulinaryLand BLS has determined that, based on its 2015 base year spending survey, the average household purchases only three items each month: produce, spices, and kitchen tools. The BLS survey data and updated 2018 data is given below. Round off all answers to two decimal points as necessary. Item Produce Spices Kitchen tools $20/tool 2015 Price $10/lb $25/lb 2015 Quantity 40 lbs/mo 2 lb/mo 2 tools/mo 2018 Price $12/lb $35/lb $20/tool 2018 Quantity. 32lbs/mo 1 lb/mo 3 tools/mo a 4 points) Calculate the Cooking Price Index for CulinaryLand in 2018. (Compute this the same way the US BLS calculates the US CPI.) b 2 points) The value of the CPI at the end of 2016 was exactly 1.06 (or 106 if you multiply by 100). Calculate the inflation rate between 2016 and 2018. c 3 points) Based on your answer in part a, calculate the real price of spices in 2018 (in base year dollars). d 3 points) The Boskin Commission found that the CPI tended to overstate the rate inflation. Which problem found by the Commission is illustrated by data given above? How do you know? Explain your answer. Suppose that the CulinaryLand BLS has determined that, based on its 2015 base year spending survey, the average household purchases only three items each month: produce, spices, and kitchen tools. The BLS survey data and updated 2018 data is given below. Round off all answers to two decimal points as necessary. Item Produce Spices Kitchen tools $20/tool 2015 Price $10/lb $25/lb 2015 Quantity 40 lbs/mo 2 lb/mo 2 tools/mo 2018 Price $12/lb $35/lb $20/tool 2018 Quantity. 32lbs/mo 1 lb/mo 3 tools/mo a 4 points) Calculate the Cooking Price Index for CulinaryLand in 2018. (Compute this the same way the US BLS calculates the US CPI.) b 2 points) The value of the CPI at the end of 2016 was exactly 1.06 (or 106 if you multiply by 100). Calculate the inflation rate between 2016 and 2018. c 3 points) Based on your answer in part a, calculate the real price of spices in 2018 (in base year dollars). d 3 points) The Boskin Commission found that the CPI tended to overstate the rate inflation. Which problem found by the Commission is illustrated by data given above? How do you know? Explain your answer.

Answer rating: 100% (QA)

a Calculate the Cooking Price Index for CulinaryLand in 2018 The Cooking Price Index CPI for Culinar... View the full answer