Is the mean percentage price change calculated in Problem 3.30 or 3.31 more appropriate as a measure of the impact of the price changes on this particular consumer? Why?
Problem 3.30
Suppose the retail prices of the selected items have changed as indicated in Table 3.6. Determine the mean percentage change in retail prices without reference to the average expenditures included in the table.
Table 3.6 Changes in the Retail Prices of Selected Items During a Particular Year
Average expenditure per month
Item
Percent increase
(before increase)
Milk
10%
$20.00
Ground beef
26
30.00
Apparel
28
Gasoline
20
50.00
Problem 3.31
Referring to Table 3.6, determine the mean percentage change by weighting the percent increase for each item by the average amount per month spent on that item before the increase.
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