uppose about 35% of expenditure per consumer unit was spend on housing. What

does this figure indicate in terms of how much per month a consumer unit spends on

housing each month? Does this estimation seem reasonable to you?

f. Suppose that inflation saw a 3% increase in the expenditures per consumer unit in 2023.

What is the estimate of the value in 2023?

### Part 1: **Housing Expenditure Estimate**

If **35% of a consumer unit's expenditure** is spent on housing, this means that for every 100 dollars of total expenditure, 35 dollars goes toward housing. To estimate the **monthly expenditure on housing**, we need the total monthly expenditure of a typical consumer unit.

Let's assume a hypothetical **total monthly expenditure**. For example, if the total monthly expenditure is:

- $3,000 per month, then 35% of that is spent on housing:
  
  \[
  0.35 \times 3000 = 1050 \text{ dollars per month on housing}
  \]

This figure indicates that **$1,050 per month** would be spent on housing if the total expenditure is $3,000.

Whether this estimate is reasonable depends on several factors like location and household income, but spending 35% on housing is commonly considered within the normal range for many households.

### Part 2: **Inflation Impact in 2023**

If inflation causes a **3% increase** in expenditures per consumer unit in 2023, the new expenditure value can be calculated by increasing the 2022 value by 3%.

Suppose the 2022 expenditure was **$3,000** per month. The increase due to inflation would be:

\[
0.03 \times 3000 = 90 \text{ dollars increase per month}
\]

Thus, the estimated total expenditure for 2023 would be:

\[
3000 + 90 = 3090 \text{ dollars per month}
\]

So, after the 3% inflation increase, the new monthly expenditure in 2023 would be **$3,090**.

### Reasonableness:
- A 3% inflation increase is a moderate level of inflation, so this estimate seems reasonable based on historical inflation rates.

---

Would you like more details on any part of the explanation?

Here are 5 follow-up questions for further exploration:
1. What are the general guidelines for an ideal percentage of income spent on housing?
2. How does housing expenditure differ across regions or cities?
3. What factors influence a consumer unit's total monthly expenditure?
4. How does inflation typically affect housing costs relative to other expenses?
5. Can we explore how inflation rates affect specific categories of consumer expenditures?

**Tip:** It's always good to track housing costs as a percentage of your income to avoid budget strain, especially when accounting for future inflation.

Suppose about 35% of expenditure per consumer unit was spent on housing. What does this figure indicate in terms of how much per month a consumer unit spends on housing each month? Does this estimation seem reasonable to you? Suppose that inflation saw a 3% increase in the expenditures per consumer unit in 2023. What is the estimate of the value in 2023?

Understand how to calculate monthly housing expenditure based on 35% of total consumer unit expenditure and estimate the impact of a 3% inflation increase in 2023. This problem involves key mathematical concepts like percentages and inflation. Suitable for Grades 9-12.

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