Scenario 6-2
The price tag on a golf ball in 1975 read $0.20, and the price tag on a golf ball in 2005 read $2.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3.
-Refer to Scenario 6-2. In 1975 dollars, a 1975 golf ball cost $0.20 and a 2005 golf ball cost

Question

Quizplus · Accepted Answer

To find out the cost of the golf balls in 1975 dollars, we need to adjust the price of the golf balls in 2005 using the CPI. The formula is (Price in year B/ CPI in year B) x CPI in year A.

Using the formula:
($2.00/191.3) x 52.3 = $0.55

Therefore, in 1975 dollars, a golf ball in 1975 cost $0.20, and a golf ball in 2005 cost $0.55. Golf balls were cheaper in 1975.

Scenario 6-2 The Price Tag on a Golf Ball in 1975 Read