Table 11-12. Will's expenditures on food for three consecutive years, along with other values, are presented in the table below.
-Refer to Table 11-12. Suppose the consumer price index is 15.5 percent higher in 2011 than in 2009. Then Will's food expenditures for 2010 in 2011 dollars amount to

Question

Table 11-12. Will's expenditures on food for three consecutive years, along with other values, are presented in the table below. 
-Refer to Table 11-12. Suppose the consumer price index is 15.5 percent higher in 2011 than in 2009. Then Will's food expenditures for 2010 in 2011 dollars amount to

Quizplus · Accepted Answer

To calculate Will's food expenditures in 2011 dollars for 2010, we need to adjust the 2010 expenditures for inflation using the CPI.

First, we need to find the inflation rate from 2010 to 2011:
Inflation rate = (CPI in 2011 - CPI in 2010) / CPI in 2010
Inflation rate = (172.2 - 149.2) / 149.2
Inflation rate = 15.4%

Since the CPI increased by 15.4%, we need to multiply Will's 2010 food expenditures by 1 + 0.154 to adjust for inflation:
2010 food expenditures in 2011 dollars = $5,560 x 1.154
2010 food expenditures in 2011 dollars = $6,380.

Therefore, the best choice is B) $6,380.