Scenario 11-1
The price tag on a tennis ball in 1975 read $0.10, and the price tag on a tennis ball in 2005 read $1.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3.
-Refer to Scenario 11-1. The price of a 1975 tennis ball in 2005 dollars is

Question

Quizplus · Accepted Answer

To calculate the price of a 1975 tennis ball in 2005 dollars, we need to use the CPI to adjust for inflation. The formula to adjust for inflation is (Price in Year B) = (Price in Year A) x (CPI in Year B) / (CPI in Year A). 
Using this formula, we get:
(Price in 2005) = ($0.10) x (191.3) / (52.3) = $0.37
Therefore, the price of a 1975 tennis ball in 2005 dollars is $0.37, which is answer choice C.

Scenario 11-1 The Price Tag on a Tennis Ball in 1975 Read