## Related questions with answers

Question

Use Table $3.4$ to answer the following question. Assuming that all prices have risen at the same rate as the CPI. If a ski lift ticket cost $\$ 100$ in $2016$, what was its price in $1985$ dollars?

Solution

VerifiedAnswered 2 years ago

Answered 2 years ago

Step 1

1 of 3Recall that we can have the CPI Ratio as:

$\begin{aligned} \text{2016 CPI Ratio}&=\frac{\text{2016 CPI}}{\text{Reference CPI}} \end{aligned}$

with 2016 CPI equal to 240, and 1985 CPI equal to 107.6 as reference value, we can have the ratio as:

$\begin{aligned} \text{2016 CPI Ratio}&=\frac{\text{2016 CPI}}{\text{Reference CPI}}\\ &=\frac{240}{107.6}\\ &=2.230483271 \end{aligned}$

The 2016 CPI ratio is 2.230483271

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