If the price of a soda was 15 cents in 1970,when the CPI was 50,and 50 cents in 2007 when the CPI was 172,then the real price of

Question

Quizplus · Accepted Answer

To find the real price of the soda in 2007 dollars, we need to use the formula: real price = (nominal price/CPI) x 100. 
For the 1970 soda, real price = (15/50) x 100 = 30 cents. 
To adjust this to 2007 dollars, we need to use the CPI ratio: CPI ratio = CPI in 2007/CPI in 1970 = 172/50 = 3.44. 
Therefore, the real price of the 1970 soda in 2007 dollars is 30 x 3.44 = 103.2 cents, or $1.032. 
So, the correct choice is C.

If the Price of a Soda Was 15 Cents in 1970,when