Question

the average price of a domestic airline ticket in a particular region was $377 in 1991 and $213 in 2020. use the table to complete parts (a) and (b)
click here to view the consumer price index table

a. if the 1991 average airfare had increased according to the consumer price index, what would the average fare have been in 2020? does this mean that airfares rose more or less than expected due to inflation?
the average fare would have been $ . this means the airfares rose expected.
(round to the nearest dollar are needed.)

consumer price index (cpi)

year cpi year cpi year cpi
1981 90.9 1995 152.4 2009 214.5
1982 96.5 1996 156.9 2010 218.1
1983 99.6 1997 160.5 2011 224.9
1984 103.9 1998 163.0 2012 229.6
1985 107.6 1999 166.6 2013 233.0
1986 109.6 2000 172.2 2014 236.7
1987 113.6 2001 177.1 2015 237.0
1988 118.3 2002 179.9 2016 240.0
1989 124.0 2003 184.0 2017 245.1
1990 130.7 2004 188.9 2018 251.1
1991 136.2 2005 195.3 2019 255.7
1992 140.3 2006 201.6 2020 258.8

Explanation:

Step1: Identify CPI values

The CPI in 1991 is 136.2 and in 2020 is 258.8.

Step2: Calculate the expected price in 2020

Use the formula $\text{Expected price in 2020}=\text{Price in 1991}\times\frac{\text{CPI in 2020}}{\text{CPI in 1991}}$. So, $377\times\frac{258.8}{136.2}$.
$377\times\frac{258.8}{136.2}=377\times1.899559\approx716$.

Step3: Compare with actual price

The actual price in 2020 is $213$. Since $213<716$, airfares rose less than expected.

Answer:

The average fare would have been $\$716$. This means the airfares rose less than expected.