Scenario 24-1
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 24-1.In 1975 dollars,a 1975 tennis ball cost $0.10 and a 2005 tennis ball cost
A)$0.27,so tennis balls were cheaper in 1975.
B)$0.27,so tennis balls were cheaper in 2005.
C)$3.66,so tennis balls were cheaper in 1975.
D)$3.66,so tennis balls were cheaper in 2005.

Question

Quizplus · Accepted Answer

To find the cost of a 2005 tennis ball in 1975 dollars, we need to adjust for inflation. We can use the formula: (price in later year * CPI in earlier year) / CPI in later year. Plugging in the numbers, we get: (1.00 * 52.3) / 191.3 = 0.27. Therefore, a 2005 tennis ball cost $0.27 in 1975 dollars. Since this is less than the actual price of a tennis ball in 1975, we can conclude that tennis balls were cheaper in 1975.

Scenario 24-1 The Price Tag on a Tennis Ball in 1975 Read