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 2012 is
A) 87.
B) 104.
C) 131.
D) 298.

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 2012 is
A) 87. 
B) 104. 
C) 131. 
D) 298.

Quizplus · Accepted Answer

To calculate the CPI for 2012, we need to first find the total cost of the basket of goods in 2010 and then find the total cost of the same basket of goods in 2012.

Total cost of basket in 2010 = (3 x $10) + (1 x $20) + (2 x $5) + (4 x $8) + (6 x $4) = $98

Total cost of basket in 2012 = (4 x $12) + (2 x $25) + (3 x $6) + (5 x $10) + (8 x $5) = $431

To calculate the CPI, we use the formula:

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

CPI for 2012 = ($431/$98) x 100 = 131.63 or 131 (rounded to the nearest whole number)

Therefore, the correct answer is C) 131.

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