from 2010 to 2011 and from 2011 to 2012 from 2010 to 2011 f

% from 2010 to 2011, and %from 2011 to 2012. %from 2010 to 2011. %from 2010 to 2011,and, %from 2011 tc the base years have the same consumption quantities Time

Solution

a) Consumer expenditure in 2010 = Price of good A x Quantity of good A in 2010 + Price of good B x Quantity of good B + Price of good C x Quantity of good C = 10 x 10 + 5 x 18 + 1 x 10 = 100 + 90 + 10 = $ 200

Consumer expenditure in 2011 = 15 x 8 + 3 x 30 + 2 x 5 = 120 + 90 + 10 = $ 220

Consumptioin expenditure in 2012 = 20 x 5 + 4 x 25 + 5 x 10 = 100 + 100 + 50 = $ 250

b) From 2010 to 2011 = (220 - 200)/200 x 100 = 10%

From 2011 to 2012 = (250 - 220)/220 x 100 = 30/220 x 100 = 13.64%

c) Provide drop down option.

d) Using 2010 consumption level:

Consumer expenditure in 2010 = Price of good A x Quantity of good A in 2010 + Price of good B x Quantity of good B + Price of good C x Quantity of good C = 10 x 10 + 5 x 18 + 1 x 10 = 100 + 90 + 10 = $ 200

Consumer expenditure in 2011 = 15 x 10 + 3 x 18 + 2 x 10 = 150 + 54 + 20 = $ 224

Consumptioin expenditure in 2012 = 20 x 10 + 4 x 18 + 5 x 10 = 200 + 72 + 50 = $ 322

Rate of inflation from 2010 to 2011 = (224 - 200)/200 x 100 = 12%

Rate of inflation from 2011 to 2012 = (322 - 224)/224 x 100 = 43.75%