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 2007 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 2007 is the base year, then the consumer price index was

Quizplus · Accepted Answer

To calculate the consumer price index (CPI) for each year using 2007 as the base year, we need to use the following formula:
CPI = (cost of basket in current year/cost of basket in base year) x 100

For 2006:
Cost of basket in 2006 = (5 x $24) + (10 x $8) = $200
CPI in 2006 = ($200/$270) x 100 = 74.1

For 2007:
Cost of basket in 2007 = (5 x $30) + (10 x $12) = $300
CPI in 2007 = ($300/$300) x 100 = 100

For 2008:
Cost of basket in 2008 = (5 x $32) + (10 x $15) = $350
CPI in 2008 = ($350/$300) x 100 = 114.8

Therefore, the consumer price index was 74.1 in 2006, 100 in 2007, and 114.8 in 2008, which corresponds to choice A.

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

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