b.What is the percentage change in the real price (1980 dollars)from 1980 to 2001? ntage change in real price from 1980to2001 1.54-188 1.88 =0.18=-18%. c.Convert the CPI into 1990=100 and determine the real price of butter in 1990 dollars. To convert the CPI into 1990=100.divide the CPI for each year by the CPI for 1990. Use the formula from part(a)and the new CPI numbers below to find the real price of milk. New CPI 1980 63.1 Real price ofmilk 1980 2.98 1983 82.3 1985$2.58 1990 100 1990 s1.99 1995 116.6 1995s1.38 2000 131.8 2000 s1.91 2001 135.6 2001 $2.43 d.What sthe change in therea ice) 2001?Compare this with your answer in(b).What do you notice?Explain. Percentage change in real price om1980 to2001 2.0.11Thiswor almost entical opfor rounding 2.98 error)to the answe receivedfor part b.It does not matter which year is chosen as the base year 3.At the time this book went to print,the minimum wage was $5.15.To find the current minimum wage,go to http://www.bls.gov/cpi/home.htm Click on:Consumer Price Index-All Urban Consumers(Current Series) Select:U.S.Allitems This will give you the CPI from 1913 to the present. a.With these values,calculate the current real minimum wage in 1990 dollars. real minimum wage 2003= C+515=1307 CP1OS 163 5.15=54.13 b.What is the percentage change in the real minimum wage from 1985 to the present.stated in real 1990 dollars? Assume the minimum wage in 1985 was $3.35.Then, real minimum wage 1985= CP4m+335=1302·335=5407. 107.6b. What is the percentage change in the real price (1980 dollars) from 1980 to 2001? Percentage change in real price from 1980 to 2001 =  1.54 −1.88 1.88 = −0.18 = −18%. c. Convert the CPI into 1990 = 100 and determine the real price of butter in 1990 dollars. To convert the CPI into 1990=100, divide the CPI for each year by the CPI for 1990. Use the formula from part (a) and the new CPI numbers below to find the real price of milk. New CPI 1980 63.1 Real price of milk 1980 $2.98 1985 82.3 1985 $2.58 1990 100 1990 $1.99 1995 116.6 1995 $1.38 2000 131.8 2000 $1.91 2001 135.6 2001 $2.43 d. What is the percentage change in the real price (1990 dollars) from 1980 to 2001? Compare this with your answer in (b). What do you notice? Explain. Percentage change in real price from 1980 to 2001 = − = − = − 2.43 2.98 0.18 18% 2.98 .This answer is almost identical (except for rounding error) to the answer received for part b. It does not matter which year is chosen as the base year. 3. At the time this book went to print, the minimum wage was $5.15. To find the current minimum wage, go to http://www.bls.gov/cpi/home.htm Click on: Consumer Price Index- All Urban Consumers (Current Series) Select: U.S. All items This will give you the CPI from 1913 to the present. a. With these values, calculate the current real minimum wage in 1990 dollars. real minimum wage 2003 = CPI1990 CPI1998 * 5.15 = 130.7 163 * 5.15 = $4.13. b. What is the percentage change in the real minimum wage from 1985 to the present, stated in real 1990 dollars? Assume the minimum wage in 1985 was $3.35. Then, real minimum wage 1985 = CPI1990 CPI1985 * 3.35 = 130.7 107.6 * 3.35 = $4.07