2. Problems and Applications Q2 The residents of Vegopia spend all of their income on cauliflower, broccoli, and carrots. In 2016, they spend a total of $210 for 100 heads of cauliflower, $70 for 50 bunches of broccoli, and $45 for 450 carrots. In 2017, they spend a total of $225 for 90 heads of cauliflower, $112 for 80 bunches of broccoli, and $120 for 400 carrots.

COMPLETE QUESTION:

Using 2016 as the base year, the CPI for 2016 is , and the CPI for 2017 is . The inflation rate in 2017 isusing the CPI.

Inflation rate is 41%

Explanation:

The attachment below clearly shows the calculations

Inflation rate in 2017  = 41%.

Explanation:

2016

$210 was spent on for 100 heads of cauliflower ⇒ $210/100 =$2.1 per 1 head of cauliflower

$45 was spent on for 450 carrots ⇒ $45/450 =$0.1 per carrot

$70 was spent on for 50 bunches of broccoli⇒ $70/50 =$1.4 per bunch of broccoli

2017

$225 was spent on for 90 heads of cauliflower ⇒ $225/90 =$2.5 per 1 head of cauliflower

$120 was spent on for 400 carrots ⇒ $120/400 =$0.3 per carrot

$112 was spent on for 80 bunches of broccoli⇒ $112/80 =$1.4 per bunch of broccoli

As stated by the question,  2016 is the base year,

therefore CPI for 2016 is 100,

Hence,  CPI for 2017 is (225 + 112 + 120)/(210 + 70 + 45)*100 = 141.

Inflation rate in 2017 = (141 - 100)/100*100 = 41%.

answer; rapid growth in buyer demand and high buyer switching cost;

answer; experimentation;