Question: In 1920, a new black Ford cost $700. Gasoline cost 20¢ per gallon. If we disregard the differences in vehicle quality and features, what has been the average annual price escalation rate in cars if we use a Ford Tempo for comparison that sells for $11,000 today? What is the average annual price escalation rate for gasoline using today’s average price of $2.80 per gallon? Assuming the average change in the consumer price index during this period was 3% per year, has the real value of cars and gasoline gone up or down?