The question is incomplete and incorrectly typed! The correct and complete question along with answer and explanation is provided below.
Question:
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. In 1975 dollars, a 1975 golf ball cost $0.20 and a 2005 golf ball cost
a. $0.55, so golf balls were cheaper in 1975.
b. $0.55, so golf balls were cheaper in 2005.
c. $7.32, so golf balls were cheaper in 1975.
d. $7.32, so golf balls were cheaper in 2005.
Answer:
a. $0.55, so golf balls were cheaper in 1975.
Explanation:
In 1975 dollars,
Price of golf ball in year 2005 x (CPI in 1975/CPI in 2005)
$2*(52.3/191.3) = 2 x 0.273 = 0.546 ≅ $0.55
So golf balls were cheaper in 1975 at the rate $0.20 as compared to $0.55.
Bonus:
If were asked to find the the price of 1975 golf ball in 2005 dollars, then
Price of golf ball in the year 1975 x (CPI in 2005/CPI in 1975)
$0.20*(191.3/52.3) = 0.20 x 3.65 = $0.73
so it means that in 1975 the price of golf ball would have $0.73 as compared to $2 in 2005 dollars.
