Table 11-3
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. $$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Price of a } \
\text { Buak }
\end{array} & \begin{array} { c }
\text { Price of a } \
\text { Calculator }
\end{array} \
\hline 2006 & \$ 24 & \$ 8 \
\hline 2007 & \$ 30 & \$ 12 \
\hline 2008 & \$ 32 & \$ 15 \
\hline
\end{array}$$
-Refer to Table 11-3. If 2006 is the base year, then the consumer price index was

Question

Table 11-3
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Price of a } \
\text { Buak }
\end{array} & \begin{array} { c } 
\text { Price of a } \
\text { Calculator }
\end{array} \
\hline 2006 & \$ 24 & \$ 8 \
\hline 2007 & \$ 30 & \$ 12 \
\hline 2008 & \$ 32 & \$ 15 \
\hline
\end{array}$$
-Refer to Table 11-3. If 2006 is the base year, then the consumer price index was

Quizplus · Accepted Answer

To calculate the consumer price index (CPI), we need to use the formula:

CPI = (Cost of basket in current year / Cost of basket in base year) x 100

In this case, the basket consists of 5 books and 10 calculators. Therefore, the cost of the basket in 2006 is:

(5 x $24) + (10 x $8) = $240

Using this as the base year, we can calculate the CPI for each year:

CPI in 2007 = (5 x $30) + (10 x $12) / $240 x 100 = 135
CPI in 2008 = (5 x $32) + (10 x $15) / $240 x 100 = 155

Therefore, the CPI was 100 in the base year (2006), 135 in 2007, and 155 in 2008. Choice A is the correct answer.

Table 11-3 the Table Below Pertains to Studious, an Economy

Table 11-3
the Table Below Pertains to Studious, an Economy