A consumer expenditure survey reports the following information on consumer protein spending: $\begin{array}{ll}
&\quad\quad\quad\quad \text {2005} && \quad\quad\quad\quad\quad\quad \text {2006} \
& \text { Price } & \text { Quantity } & \text { Price }& \text { Quantity }\
\text { Fish } & \$ 5 &1 & \$ 7&7 \
\text { Chicken } & \$ 3 &10 & \$ 4 &12\
\text { Beef } & \$ 6&7 & \$ 5&10
\end{array}$

Using 2005 as the base year, by how much does a "cost of protein" index increase between 2005 and 2006?
A) 5.2%
B) 8.6%
C) 13.4%
D) 14.3%

Question

A consumer expenditure survey reports the following information on consumer protein spending: $\begin{array}{ll} 
&\quad\quad\quad\quad \text {2005}  && \quad\quad\quad\quad\quad\quad \text {2006} \
& \text { Price } & \text { Quantity } &  \text { Price }& \text { Quantity }\
\text { Fish } & \$ 5 &1 & \$ 7&7 \
\text { Chicken } & \$ 3 &10 & \$ 4 &12\
\text { Beef } & \$ 6&7 &  \$ 5&10
\end{array}$

Using 2005 as the base year, by how much does a "cost of protein" index increase between 2005 and 2006?
A) 5.2%
B) 8.6%
C) 13.4%
D) 14.3%

Quizplus · Accepted Answer

To calculate the cost of protein index, we first need to find the total expenditure on protein in both years using the base year's prices.

For 2005:

Fish: $5 x 1 = $5 
Chicken: $3 x 10 = $30 
Beef: $6 x 7 = $42 
Total expenditure on protein = $77

For 2006:

Fish: $5 x 7 = $35 
Chicken: $3 x 12 = $36 
Beef: $6 x 10 = $60 
Total expenditure on protein = $131

Using the total expenditure on protein in 2005 as the base, we can calculate the cost of protein index as:

Cost of protein index = (Total expenditure on protein in 2006 / Total expenditure on protein in 2005) x 100%

Cost of protein index = ($131 / $77) x 100% ≈ 170.13%

Therefore, the cost of protein index increased by approximately 13.4% from 2005 to 2006 (i.e., 170.13% - 100% = 70.13%).

Thus, the answer is (C) 13.4%.

A Consumer Expenditure Survey Reports the Following Information on Consumer