The table below shows the current and base-year prices of different goods in a market basket.
The consumer price index (CPI)for the current year is _____.
?
Table 6.2
?
?
$$\begin{array} { c c c c }
\text { Product } & \begin{array} { c }
\text { Quantity in } \
\text { market basket }
\end{array} & \begin{array} { c }
\text { Price in } \
\text { base year } ( \$ )
\end{array} & \begin{array} { c }
\text { Price in } \
\text { current year } ( \$ )
\end{array} \
\hline \text { Bread } & 10 & 1.00 & 1.50 \
\text { Milk } & 5 & 1.00 & 2.00 \
\text { Gum } & 50 & 0.20 & 0.50
\end{array}$$
?
A)2
B)50
C)55
D)182
E)200

Question

The table below shows the current and base-year prices of different goods in a market basket.
The consumer price index (CPI)for the current year is _____.
?
Table 6.2
?
?
$$\begin{array} { c c c c } 
\text { Product } & \begin{array} { c } 
\text { Quantity in } \
\text { market basket }
\end{array} & \begin{array} { c } 
\text { Price in } \
\text { base year } ( \$ )
\end{array} & \begin{array} { c } 
\text { Price in } \
\text { current year } ( \$ )
\end{array} \
\hline \text { Bread } & 10 & 1.00 & 1.50 \
\text { Milk } & 5 & 1.00 & 2.00 \
\text { Gum } & 50 & 0.20 & 0.50
\end{array}$$
?
A)2
B)50
C)55
D)182
E)200

Quizplus · Accepted Answer

The CPI is calculated by dividing the total cost of the market basket in the current year by the total cost in the base year, then multiplying by 100. The base year cost is (10*1.00) + (5*1.00) + (50*0.20) = $30. The current year cost is (10*1.50) + (5*2.00) + (50*0.50) = $60. The CPI is ($60/$30) * 100 = 200.

The Table Below Shows the Current and Base-Year Prices of Different