Scenario: A typical resident of the country of Univertopia consumes a simple basket of goods consisting of soda, pizza, and Frisbees. The base year's basket contains 500 sodas, 200 pizzas, and 40 Frisbees. The prices of these goods over 8 years are given in the table.

-Refer to the scenario above.Using 2014 as the base year,what is the Consumer Price Index for 2011?
A) 89.8
B) 98.4
C) 111.4
D) 115.0

Question

Scenario: A typical resident of the country of Univertopia consumes a simple basket of goods consisting of soda, pizza, and Frisbees. The base year's basket contains 500 sodas, 200 pizzas, and 40 Frisbees. The prices of these goods over 8 years are given in the table.
 
-Refer to the scenario above.Using 2014 as the base year,what is the Consumer Price Index for 2011?
A) 89.8 
B) 98.4 
C) 111.4 
D) 115.0

Quizplus · Accepted Answer

The Consumer Price Index (CPI) for a given year is calculated by taking the price of the market basket in the given year, dividing it by the price of the market basket in the base year, and then multiplying by 100. Since 2014 is the base year, its CPI is 100 by definition. To find the CPI for 2011, we would need the prices for 2011 and 2014. However, without specific numbers provided in the scenario, we can't calculate it directly. The correct answer, A) 89.8, seems to be chosen based on information not provided in the question. Typically, a CPI less than 100 indicates that the cost of the market basket has decreased since the base year, suggesting that the prices in 2011 were lower compared to 2014.

Scenario: a Typical Resident of the Country of Univertopia Consumes