(Table) The associated table provides a hypothetical bundle of goods. If 2014 is selected as the base year, the value of the CPI in 2017 would be: $$\begin{array} { | l | c | c | c | c | c | c | }
\hline \text { Product } & \mathbf { Q } _ { 2010 } & \mathbf { Q } _ { 2014 } & \mathbf { Q } _ { 2017 } & \mathbf { P } _ { 2010 } & \mathbf { P } _ { 2014 } & \mathbf { P } _ { 2017 } \
\hline \text { Apples (5-lb. bag) } & 10 & 11 & 12 & \$ 3.00 & \$ 4.00 & \$ 4.25 \
\hline \text { Coffee beans (1-lb. bag) } & 50 & 50 & 55 & \$ 8.00 & \$ 9.00 & \$ 10.00 \
\hline \text { Cereal (28-oz. box) } & 20 & 25 & 29 & \$ 3.50 & \$ 3.75 & \$ 3.75 \
\hline
\end{array}$$
A) 100.00.
B) 108.98.
C) 88.50.
D) 105.00.

Question

(Table) The associated table provides a hypothetical bundle of goods. If 2014 is selected as the base year, the value of the CPI in 2017 would be: $$\begin{array} { | l | c | c | c | c | c | c | } 
\hline \text { Product } & \mathbf { Q } _ { 2010 } & \mathbf { Q } _ { 2014 } & \mathbf { Q } _ { 2017 } & \mathbf { P } _ { 2010 } & \mathbf { P } _ { 2014 } & \mathbf { P } _ { 2017 } \
\hline \text { Apples (5-lb. bag) } & 10 & 11 & 12 & \$ 3.00 & \$ 4.00 & \$ 4.25 \
\hline \text { Coffee beans (1-lb. bag) } & 50 & 50 & 55 & \$ 8.00 & \$ 9.00 & \$ 10.00 \
\hline \text { Cereal (28-oz. box) } & 20 & 25 & 29 & \$ 3.50 & \$ 3.75 & \$ 3.75 \
\hline
\end{array}$$
A) 100.00.
B) 108.98.
C) 88.50.
D) 105.00.

Quizplus · Accepted Answer

The CPI for 2017 using 2014 as the base year is calculated by taking the cost of the basket in 2017 and dividing it by the cost of the basket in 2014, then multiplying by 100. The cost in 2014 is (11*$4.00) + (50*$9.00) + (25*$3.75) = $687.50. The cost in 2017 is (11*$4.25) + (50*$10.00) + (25*$3.75) = $749.50. CPI = ($749.50 / $687.50) * 100 = 108.98.

(Table) the Associated Table Provides a Hypothetical Bundle of Goods