High School

Shirley purchased a bag of fruits and vegetables from a roadside vendor in 1970 for $9. If the prices of these items closely tracked the overall inflation rate over the decades, what should she expect to pay for this food from a similar vendor in 2006? The price index was 38.8 in 1970 and 180 in 2006.

Answer :

Final answer:

Shirley should expect to pay approximately $41.75 for the bag of fruits and vegetables from a similar vendor in 2006.

Explanation:

To calculate the expected price of the bag of fruits and vegetables in 2006, we can use the formula:

Expected Price = (Price in 1970) * (Price Index in 2006) / (Price Index in 1970)

Given that Shirley purchased the bag of fruits and vegetables for $9 in 1970 and the price index was 38.8 in 1970, we can substitute these values into the formula:

Expected Price = $9 * 180 / 38.8

Simplifying the calculation:

Expected Price = $41.75

Therefore, Shirley should expect to pay approximately $41.75 for the bag of fruits and vegetables from a similar vendor in 2006.

Learn more about calculating the expected price based on inflation rate here:

https://brainly.com/question/30875046

#SPJ11

Other Questions