Question 1

Carol bought 25.5 hectares of land for $63,000. If she buys another 80 hectares of land at the same price per hectare as her first purchase, how much must she pay for her second purchase?

Accepted Answer

The price per hectare is $63,000 / 25.5 = $2,470.59. For 80 hectares, she must pay 80 * $2,470.59 = $197,647.06.

Question 2

If the "basket" of goods and services included in the consumer price index (CPI) cost $21,350 in the base year (when the CPI = 100) and currently costs $28,550, what is the current CPI?

Accepted Answer

The current CPI is calculated by dividing the current cost of the basket by the base year cost and then multiplying by 100. So, $CPI = \frac{28,550}{21,350} \times 100 = 133.72$.

Question 3

The CPI increased from 125.0 to 132.0 over a three-year period. If a person earned $40,000 at the beginning of the three-year period, how much would they have to earn at the end of the three-year period to maintain the same purchasing power?

Accepted Answer

The increase in CPI from 125.0 to 132.0 represents a 5.6% increase in inflation (132.0 - 125.0 = 7.0; 7.0 / 125.0 = 0.056 or 5.6%). To maintain the same purchasing power, the person's salary must also increase by 5.6%. Therefore, the new salary would be $40,000 * 1.056 = $42,240.

Question 4

Sally earns $25 per hour today. Seven years ago she earned $20.75 per hour. During the seven-year period the CPI rose from 136.5 to 158.2. Has Sally's buying power increased or decreased and by how much in current year's dollars?

Accepted Answer

The answer of Sally earns $25 per hour today. Seven...

Question 5

The price of a box of chalk has increased from $.89 to $1.39 over a ten-year period. What index number would represent the change in price over the ten-year period?

Accepted Answer

The index number representing the change in price is calculated by taking the new price, subtracting the old price, dividing by the old price, and then multiplying by 100 to get a percentage. So, $\frac{1.39 - 0.89}{0.89} \times 100 = 56.2$. Adding this to 100 (to account for the original price as the base of 100), we get 156.2.

Question 6

Total overhead of $235,000 is allocated according to the proportion of labour hours. Department A used 1830 hours, department B used 1635 hours, and department C used 1760 hours. What amount of overhead should be allocated to department C?

Accepted Answer

The total hours used by all departments is 1830 + 1635 + 1760 = 5225 hours. The proportion of hours used by department C is 1760/5225. The overhead allocated to department C is (1760/5225) * $235,000 = $79,157.89.

Question 7

The price of a laser printer dropped from $299.99 to $175. What index number would represent the change in price?

Accepted Answer

The index number is calculated by dividing the new price by the old price and multiplying by 100. Therefore, the index number is (175/299.99) * 100 = 58.3.

Question 8

The basket of goods and services included in the Consumer Price Index cost $425 in the base year. If the same basket cost $575 ten years later, what was the CPI on that date?

Accepted Answer

The answer of The basket of goods and services included...

Question 9

Express the following ratio whose smallest term is 1. 3: 21: 0.75

Accepted Answer

The answer of Express the following ratio whose smallest term...

Question 10

Victoria is going to ask for a raise. Over the past year, the CPI has gone from 119.6 to 122.6. Victoria now earns $45,000. What is the minimum raise that Victoria should ask for in order to maintain the same buying power?

Accepted Answer

To maintain the same buying power, Victoria's raise should match the increase in the CPI. The CPI has increased by 2.5% (122.6 - 119.6 / 119.6 * 100). Therefore, Victoria should ask for a raise of 2.5% of her current salary, which is $45,000 * 0.025 = $1,125. Her new salary should be $45,000 + $1,125 = $46,125.

Question 11

If the US$ strengthens by 2% relative to the euro (US$1.00 = €0.746826), what will be the new value for the euro per US$1.00?

Accepted Answer

If the US$ strengthens by 2%, the new exchange rate is calculated by increasing the current rate by 2%. €0.746826 * 1.02 = €0.7618.

Question 12

Sam is going to ask for a raise. Over the past year, the CPI has gone from 129.9 to 131.9. Sam currently earns $42,500. What is the minimum raise that Sam should ask for in order to maintain the same buying power?

Accepted Answer

To maintain the same buying power, Sam needs to adjust his salary based on the increase in the Consumer Price Index (CPI). The CPI went from 129.9 to 131.9, which is an increase of 2 points. To find the percentage increase: (131.9 - 129.9) / 129.9 = 0.01539, or 1.539%. To maintain the same buying power, Sam's salary needs to be increased by 1.539% of $42,500, which is $654.075. Adding this to his current salary gives $42,500 + $654.075 = $43,154.075, which rounds to $43,154.

Question 13

If the US$ weakens by 5% relative to the euro (US$1.00 = €0.746826), what will be the new value for the euro per US$1.00?

Accepted Answer

If the US$ weakens by 5%, the new exchange rate is calculated as €0.746826 * (1 - 0.05) = €0.7095 per US$1.00.

Question 14

Express the following ratio in its lowest terms. 76: 44: 8

Accepted Answer

The greatest common divisor (GCD) of 76, 44, and 8 is 4. Dividing each term by 4 gives us 19:11:2, which is in its lowest terms.

Question 15

Nitin earns $15 per hour today. Five years ago he earned $11.75 per hour. During the five-year period the CPI rose from 136.5 to 147.6. Has Nitin's buying power increased or decreased and by how much in current year's dollars?

Accepted Answer

The answer of Nitin earns $15 per hour today. Five...

Question 16

Suppose C$1.00 is equivalent to US$0.9672. What $C amount would it cost to purchase US$1565? (Ignore any commission.)

Accepted Answer

To find the amount in Canadian dollars (C$) needed to purchase US$1565, divide the amount in US dollars by the exchange rate: US$1565 / US$0.9672 = C$1,618.07.

Question 17

The CPI increased from 130.0 to 135.0 over a two-year period. If a person earned $35,000 at the beginning of the two-year period, how much would they have to earn at the end of the two-year period to maintain the same purchasing power?

Accepted Answer

The CPI increased by 3.85% over the two-year period (135.0 / 130.0 - 1 = 0.0385). To maintain the same purchasing power, the person would need to earn 3.85% more at the end of the two-year period. $35,000 * 1.0385 = $36,346.

Question 18

Express the following ratio in its lowest terms. 130: 290: 60

Accepted Answer

The given ratio 130:290:60 can be simplified by dividing each term by their greatest common divisor, which is 10. Simplifying gives 13:29:6.

Question 19

Three partners share the partnership's profit according to the proportion of the business each owns. Ms. A owns 30%, Mr. B owns 25% and Ms. C owns the remainder. What profit would Mr. B receive if Ms. A receives $32,500?

Accepted Answer

The answer of Three partners share the partnership's profit according...

Question 20

The basket of goods and services included in the Consumer Price Index cost $35,750 in the base year. If the same basket cost $43,000 six years later, what was the CPI on that date?

Accepted Answer