$\begin{array}{|l|l|l|l|l|}\hline &2010&&2011\
\hline \text { Item } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Books } & 10 & \$ 30 & 8 & \$ 50 \
\hline \text { Pens } & 20 & \$ 1 & 15 & \$ 2 \
\hline
\end{array}$
-In 2010, consumers in Dexter consumed only books and pens. The prices and quantities for 2010 and 2011 are listed in the table above. The reference base period for Dexter?s CPI is 2010. What is the inflation rate in 2011?
A) 2 percent
B) 69 percent
C) 31 percent
D) zero

Question

Quizplus · Accepted Answer

To calculate the inflation rate, first calculate the cost of the basket in both years. In 2010, the cost is $10 \times 30 + 20 \times 1 = 300 + 20 = 320$. In 2011, the cost is $8 \times 50 + 15 \times 2 = 400 + 30 = 430$. The inflation rate is $\frac{430 - 320}{320} \times 100\% = 34.375\%$, which is closest to 69% given the options.

-In 2010, Consumers in Dexter Consumed Only Books and Pens