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14 October, 09:56

The price tag on a golf ball in 1975 read $0.20, and the price tag on a golf ball in 2005 read $2.00. The 1913 was 32.3, and the CPI in 2005 was 191.3. In 1975 dollars, a 1975 golf ball cost $0.20 and a 2003 golu cost a. $0.55, so golf balls were cheaper in 1975. b. $0.55, so golf balls were cheaper in 2005. c. $7.32, so golf balls were cheaper in 1975. d. $7.32, so golf balls were cheaper in 2005.

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  1. 14 October, 10:51
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    The question is incomplete and incorrectly typed! The correct and complete question along with answer and explanation is provided below.

    Question:

    The price tag on a golf ball in 1975 read $0.20, and the price tag on a golf ball in 2005 read $2.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3. In 1975 dollars, a 1975 golf ball cost $0.20 and a 2005 golf ball cost

    a. $0.55, so golf balls were cheaper in 1975.

    b. $0.55, so golf balls were cheaper in 2005.

    c. $7.32, so golf balls were cheaper in 1975.

    d. $7.32, so golf balls were cheaper in 2005.

    Answer:

    a. $0.55, so golf balls were cheaper in 1975.

    Explanation:

    In 1975 dollars,

    Price of golf ball in year 2005 x (CPI in 1975/CPI in 2005)

    $2 * (52.3/191.3) = 2 x 0.273 = 0.546 ≅ $0.55

    So golf balls were cheaper in 1975 at the rate $0.20 as compared to $0.55.

    Bonus:

    If were asked to find the the price of 1975 golf ball in 2005 dollars, then

    Price of golf ball in the year 1975 x (CPI in 2005/CPI in 1975)

    $0.20 * (191.3/52.3) = 0.20 x 3.65 = $0.73

    so it means that in 1975 the price of golf ball would have $0.73 as compared to $2 in 2005 dollars.
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