Question

The price of a gallon of gas in 1992 was $1.13. The CPI in 1992 was...

The price of a gallon of gas in 1992 was $1.13. The CPI in 1992 was 140.3 and the CPI today is 259.9. Paying $1.13 for gas in 1992 is equivalent to paying __ today.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Cost of gallon today = $2.093

CPI= (cost of gallon in given year/cost of base year)*100

Consider year 1992.

CPI=140.3 (given)

Cost of gallon = $1.13

We can find cost of base year from cpi of 1992 and apply it in today. The equation of CPI changes to

Cost of base year= (cost of gallon in 1992/CPI)*100

Cost of base year= 1.13*100/140.3 = $0.8054

consider today

CPI= 259.9

Cost of base year= $0.8054

Cost of gallon today= (CPI*cost of base year)/100

Cost of gallon today= (259.9*0.8054)/100= $2.093

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You want to estimate the average gas price in your city for a gallon of regular...
You want to estimate the average gas price in your city for a gallon of regular gas. You take a random sample of prices from 15 gas stations​ , recording an average cost of ​$2.53 and a standard deviation of ​$0.12. Create a 99​% confidence interval for the mean price per gallon of gas. 
Anne reads that the average price of regular gas in her state is $4.06 per gallon....
Anne reads that the average price of regular gas in her state is $4.06 per gallon. To see if the average price of gas is different in her city, she selects 10 gas stations at random and records the price per gallon for regular gas at each station. The data, along with the sample mean and standard deviation, are listed in the table below. Station 1     2 3 4 5 6 7 8 9   10 Price ($) 4.13 4.01...
"It wouldn't matter if you raised the price of gas to $5 per gallon, consumption of...
"It wouldn't matter if you raised the price of gas to $5 per gallon, consumption of gas would not change, because people need gas. " Does this make any sense? Use a graph in your answer.
Determine if there is a significant difference in the average price of a gallon of gas...
Determine if there is a significant difference in the average price of a gallon of gas in Michigan before and after the Thanksgiving Holiday weekend. The average price difference of 20 stations in the state was 10 cents with a standard deviation of 5 cents. Test at the .05 level of significance. What does the value 10 cents represent?
a)The price of 1KWh of electricity is 10.43cents ($0.10). Considering a gallon of gas ($2.45) contains...
a)The price of 1KWh of electricity is 10.43cents ($0.10). Considering a gallon of gas ($2.45) contains about 36 kilowatt hours of energy (1.3x10^8 J/gallon), determine which is a more expensive source of energy. b) what is the change in internal energy of a car if you put 12 gallons of gasoline into its tank? (assume that all factors, such as temperature, are constant).
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased by 27.0% between...
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased by 27.0% between 2004 and 2014. In 2004, a gallon of unleaded gasoline cost $1.58. In 2014, it cost $3.26. (a) What was the annual inflation rate between 2004 and 2014? (b) What is the change in the real price of a gallon of gasoline between 2004 and 2014?
(Inflation)Here are some recent data on the U.S. consumer price index:             Year     CPI            &
(Inflation)Here are some recent data on the U.S. consumer price index:             Year     CPI                  Year     CPI                  Year     CPI                  Year     CPI             1988     118.3                1993     144.5                1998     163.0                2003     184.0             1989     124.0                1994     148.2                1999     166.6             1990     130.7                1995     152.4                2000     172.2             1991     136.2                1996     156.9                2001     176.9             1992     140.3                1997     160.5                2002     179.9 Compute the inflation rate for each year 1989-2003 and determine which years were years of inflation.  In which years did deflation occur?  In which years did disinflation occur?  Was there hyperinflation in any year?
LP Homework 10 #8 On July​ 25, 2011, the average price of a gallon of gasoline...
LP Homework 10 #8 On July​ 25, 2011, the average price of a gallon of gasoline was ​$ 3.40. Just 8 years later the price of that same gallon of gas was ​$ 2.29. What was the rate of inflation​ (deflation) in the price of a gallon of gas over the​ period?
Suppose that the price of a gallon of gasoline is normally distributed with a mean of...
Suppose that the price of a gallon of gasoline is normally distributed with a mean of 3.73 dollars and a standard deviation of 0.25 dollars. What is the probability that a gas station charges less than or equal to 3.50 dollars per gallon? Use the information from Question 3. What is the probability that a gas station charges between 3.25 and 4 dollars per gallon? Use the information from Question 3. What is the probability that a gas station charges...
Assume that the CPI base year is 1990 and also assume that the CPI market basket...
Assume that the CPI base year is 1990 and also assume that the CPI market basket has .04 houses, .1 cars, and 1,500 gallons of gasoline. Please use 1 decimal place in your answers. Year House Price Car Price Nominal Gasoline Price per Gallon 1990 $150,000 $10,000 $2.00 2000 $210,000 $18,000 $2.10 2010 $225,000 $25,000 $2.30 2019 $250,000 $30,000 $2.50 2020 $252,000 $30,500 $2.70 What is the value of the CPI in 1990 and in 2020? What is the value...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT