Answer
a)
tennis balls: no price change
golf balls: 50% increase
bottles of Gatorade: 100% increase
b) 50% increase
c) Yes, that would affect the inflation rate calculation. The calculation of the inflation rate is based on the same basket of goods (with no changes to the basket of goods). The increased size of the bottles of gatorade affects the basket of goods, so an inflation rate cannot be accurate if it is based on two different sizes of gatorade.
d) This information should not affect the calculation of the inflation rate. However, the new flavor would offer a new good to the market (and should be noted as such).
Work Step by Step
a)
percentage change = (new price - old price)*100/new price
tennis balls:
$(2-2)*100/2$
$0*100/2$
$0*100$
golf balls:
$(6-4)*100/4$
$2*100/4$
$200/4$
$50$
bottles of gatorade:
$(2-1)*100/1$
$1*100/1$
$100/1$
$100$
b)
2014 basket of goods:
100 tennis balls at 2 dollars each
100 golf balls at 4 dollars each
200 bottles of gatorade at 1 dollar each
$(100*2+100*4+200*1)$
$(200+400+200)$
$800$
2015 basket of goods:
100 tennis balls at 2 dollars each
100 golf balls at 6 dollars each
200 bottles of gatorade at 2 dollar each
$100*2+100*6+200*2$
$200+600+400$
$1200$
Overall price increase
$(1200-800)/800*100$
$400/800*100$
$4/8*100$
$400/8$
$50$% increase