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# Quick Quiz 2! - 1.070 Production 150 \$600 \$4*1.03*150 \$4*1.07*150 Labor Input 1 \$360 \$360*1.03 \$360*1.05 Land Input 1 \$240 \$247.2 \$264 1 Calculate

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© Hadi Salehi Esfahani Quick Quiz 2! Mealia is a one-product country: It produces corn using labor and land. People in Mealia spend all their incomes on corn and imported meat. Here’s the information about the unit consumer basket of goods, prices, output value, and unit input costs under the two scenarios for 2011. Consumer Basket Prices Quantity 2010 2011 Scenario 1 2011 Scenario 2 Corn 2 \$4 \$4*1.03 \$4*1.07 Meat 1 \$4 \$4*1.08 \$4*1.07 CPI 1 Production 150 \$600 \$4*1.03*150 \$4*1.07*150 Labor Input 1 \$360 \$360*1.03 \$360*1.05 Land Input 1 \$240 1. Calculate the consumer price index for 2011 under the two scenarios. 2. Calculate the percentage change in the real returns to land and labor in 2011 under the two scenarios.

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© Hadi Salehi Esfahani Solutin to Quick Quiz 2! Consumer Basket Prices Quantity 2010 2011 Scenario 1 2011 Scenario 2 Corn 2 \$4 \$4*1.03 \$4*1.07 Meat 1 \$4 \$4*1.08 \$4*1.07 CPI 1 1.047
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