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Answer :
The consumer price index was 38.8 in 1970 and 251.1 in 2018. The 2018 price of the 1970 car is computed as $24,247.42.
Explanation:To find the 2018 price of the 1970 car, we need to adjust the 1970 price for inflation using the Consumer Price Index (CPI). The formula to compute the adjusted price is:Adjusted price = Nominal price x (CPI in year of interest / CPI in base year)We will use 1970 as the base year because we want to compare the price in 2018 to the price in 1970.Nominal price of the car in 1970 = $150Adjusted price in 2018 = $150 x (251.1 / 38.8) = $971.34So, the 2018 price of the 1970 car, adjusted for inflation, is $971.34. However, this price is not the same as what the car would actually sell for in 2018, as this calculation only accounts for inflation. To estimate the actual selling price, we would need to consider other factors such as supply and demand, the condition of the car, and other economic factors.
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