00:01
So for this problem, we have sarah's income that is $12 per week.
00:07
We have the price of one bag of popcorn at $3, and the price of smoothie is $3.
00:14
So we're trying to calculate sarah's real income in terms of smoothies.
00:21
So in order to find the real income of anything, we have to take the nominal income, which is $12.
00:30
Over the price of the good interest.
00:33
So in this case for the real income in terms of smoothie, it would be her nominal income of $12 divided by the price of the good, which is the smoothie, which is $3.
00:48
So in this case, you are going to have a real income in terms of smoothie equal to four.
00:56
And similarly, for the real income in terms of popcorn, it will be the that same thing, it will be 12 per nominal income divided by the price of the good, which is the popcorn...
