Question

In 1931 the price of a movie ticket was $0.25. The consumer price index was 15.2 in 1931, and 210 in 2008. Using 2008 prices, the real price of a movie in 1931 was

Answer 1

To determine the real price of a movie ticket in 1931 using 2008 prices, you can use the following formula:

real price in 2008 dollars = (price in 1931 dollars * CPI in 2008) / CPI in 1931

Plugging in the values you provided, we get:

real price in 2008 dollars = ($0.25 * 210) / 15.2

This simplifies to:

real price in 2008 dollars = $1.64

So the real price of a movie ticket in 1931 using 2008 prices would be about $1.64. It's important to note that this calculation is just an approximation and does not take into account changes in the quality or quantity of goods and services over time. It is merely a way to compare prices from different time periods.

Explanation: