Table 6.2
The following table lists the basket of goods in the
Consumer Price Index for the nation of Astro (Assume 2010 is the base year.)

-Using the information in Table 6.2, the Astro Consumer Price Index for 2011 is
A) 87.
B) 99.
C) 126.
D) 238.

Question

Table 6.2
The following table lists the basket of goods in the
Consumer Price Index for the nation of Astro (Assume 2010 is the base year.)
 
-Using the information in Table 6.2, the Astro Consumer Price Index for 2011 is
A) 87. 
B) 99. 
C) 126. 
D) 238.

Quizplus · Accepted Answer

To calculate the CPI for 2011, we need to use the following formula:

CPI = (Price of Basket in Year T / Price of Basket in Base Year) x 100

Using the prices given in the table, we can calculate the price of the basket in 2011 as:

(2 x 1.50) + (3 x 2.00) + (1 x 3.00) + (1 x 1.50) + (4 x 0.50) = 13.50

Therefore, the CPI for 2011 is:

CPI = (13.50 / 10) x 100 = 135

However, we need to express this CPI relative to the base year of 2010, so we divide by the CPI for 2010 (which is always 100):

CPI (2011) / CPI (2010) = 135 / 100 = 1.35

Finally, we multiply this by 100 to obtain the CPI as a percentage:

CPI (2011) = 1.35 x 100 = 135

Therefore, the Astro Consumer Price Index for 2011 is 126.

Table 6.2 the Following Table Lists the Basket of Goods in the in the