Problem Set 1

Problem Set 1

Answer 1

Movie Name

Box Office Receipts ($ millions)

Year Released

CPI

Avatar

760.5

2009

214.5

Titanic

600.8

1997

160.5

Star Wars

461

1977

60.5

Shrek

437.2

2004

188.9

E.T

399.9

1982

96.5

The formula for converting nominal dollars to real dollars is given as below.

Real Dollars Current (data year) = Dollars (base year) x (CPI data year/ CPI base year)

Star Trek real dollars will be given by, Real Dollars (2010) = 461 x (218.1/60.5) = $1661.89 million

ET real dollars will be given by, Real Dollars (2010) = 399.9 x (218.1/96.5) = $903.82 million

Titanic real dollars will be given by, Real Dollars (2010) = 600.8 x (218.1/160.5) = $816.41 million

Avatar real dollars will be given by, Real Dollars (2010) = 760.5 x ...