Table 24-1
The table below shows the prices of baseballs and baseball bats for three years.Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats.

-Refer to Table 24-1.If 2008 is the base year,then the consumer price index was

Question

Table 24-1
The table below shows the prices of baseballs and baseball bats for three years.Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats.
 
-Refer to Table 24-1.If 2008 is the base year,then the consumer price index was

Quizplus · Accepted Answer

To calculate the consumer price index (CPI), we follow the following steps:
1. Determine the basket of goods and their quantities: 6 baseballs and 2 baseball bats.
2. Determine the prices of each item in each year.
3. Calculate the cost of the basket in each year by multiplying the quantity and price of each item and then adding them up.
4. Choose a base year and calculate the cost of the basket in each year relative to the base year.
5. Calculate the CPI for each year by dividing the cost of the basket in that year by the cost of the basket in the base year and multiplying by 100.

Using this method, we get the following CPI values:

- CPI in 2008 (base year) = 100.00
- CPI in 2009 = [(6 x 0.75) + (2 x 40.00)] / [(6 x 0.75) + (2 x 30.00)] x 100 = 110.03
- CPI in 2010 = [(6 x 1.00) + (2 x 50.00)] / [(6 x 0.75) + (2 x 30.00)] x 100 = 129.20

Therefore, the best choice is B, where the CPI was 100.00 in 2008, 110.03 in 2009, and 129.20 in 2010.

Table 24-1 The Table Below Shows the Prices of Baseballs and Baseball