Scenario 11-2
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 11-2. The price of a 1975 golf ball in 2005 dollars is

Question

Quizplus · Accepted Answer

To find the price of a 1975 golf ball in 2005 dollars, we need to adjust the 1975 price for inflation using the CPI. We can use the formula:

Price in Year B = Price in Year A x (CPI in Year B / CPI in Year A)

Plugging in the numbers:

Price in 2005 = $0.20 x (191.3 / 52.3) = $0.73

Therefore, the price of a 1975 golf ball in 2005 dollars is $0.73. Choice C is the correct answer.

Scenario 11-2 The Price Tag on a Golf Ball in 1975 Read