Question

For the all questions on the assignment, you'll work with the same data.

Consider an economy in which production and prices for three years (2014, 2015, and 2016) are summarized in the following table:

Year	Food Produced	Price of Food	Shelter Produced	Price of Shelter	Medication Produced	Price of Medication
2014	20,000	$2.10	8000	$40	600	$50
2015	21,500	$2.50	8200	$40	650	$100
2016	24,000	$2.70	8400	$40	1000	$120

Economists treat 2014 as the base year in their calculations. They have determined that the average citizen consumes 30 units of food, 12 units of shelter, and 6 units of medication per year.

You will calculate several values over the next several questions. For each, remember that following instructions in formatting and rounding is essential to get points. Please double check the assignment instructions and consult the math review (and/or me) for any further questions,

1. Calculate the CPI for 2016.

2. Use the CPI to calculate the inflation rate from 2014 to 2015.

Answer 1