Suppose the respective prices of yogurt,candy bars,and popcorn in Year 1 are $1,$2,and $3.In Year 2,the unit prices of each are $2,$3,and $4 respectively.Which of the following statements is true of the price level between Year 1 and Year 2?
A)It decreased by 20 percent.
B)It increased by 33 percent.
C)It increased from $6 to $9.
D)It decreased at a rate between 20 percent and 50 percent.
E)It increased at a rate between 33 percent and 100 percent.

Question

Quizplus · Accepted Answer

To calculate the percentage change in price level, we can use the formula:
Percentage change = (New value - Old value) / Old value x 100%

For yogurt: Percentage change = (2-1)/1 x 100% = 100%
For candy bars: Percentage change = (3-2)/2 x 100% = 50%
For popcorn: Percentage change = (4-3)/3 x 100% = 33.33...%

To find the overall price level change, we can take an average of these three percentage changes:
Average percentage change = (100% + 50% + 33.33...%) / 3 = 61.11...%

Therefore, the overall price level increased at a rate between 33% and 100%, which is option E.

Suppose the Respective Prices of Yogurt,candy Bars,and Popcorn in Year