are201spg07lab1key

are201spg07lab1key - ARE 201 Fall 2009 Lab#1 Name_KEY Work...

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ARE 201 Name _____KEY___________________________________ Fall 2009 Lab #1 Work the problems and show all your calculations. Use the attached table if necessary. Give answers to the nearest dollar, except #1 - give dollars and cents. 1. Calculate the real value in 2009 (in 2009 purchasing power dollars) of a per gallon gas price in 1996 of $1.00. $1.00 x 216.0 = $1.38 156.9 2. Calculate the real value in 2009 (in 2009 purchasing power dollars) of a salary of $25,000 in 1990. $25,000 x 216.0 = $41,316 130.7 3. The average airline ticket cost $350 in 1987, and in 2009 the average airline ticket cost $450. In which year was the real cost of an airline ticket (in 2009 purchasing power dollars ) higher? Show how you arrived at your answer. 1987 ticket price in 2009 $: $350 x 216.0 = $665 113.6 Since $665 is higher than $450, ticket cost is higher in 1987.
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4. The owner of the "Mr. Pizza" restaurants earned profits of $100,000 in 1992, and he earned profits of $150,000 in 2009. Express both profits in 2009 purchasing power dollars (2009 "real" dollars). 1992 profits in 2009 $: $100,000 x 216.0 = $153,956
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