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 percent increase in prices over the two year period from 2010 to 2012 is approximately
A) 26 percent.
B) 31 percent.
C) 38 percent.
D) 98 percent.

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 percent increase in prices over the two year period from 2010 to 2012 is approximately
A) 26 percent. 
B) 31 percent. 
C) 38 percent. 
D) 98 percent.

Quizplus · Accepted Answer

To calculate the percent increase in prices from 2010 to 2012, we need to find the price of the basket of goods in 2010 and the price of the basket of goods in 2012. Using the weights given, we can calculate the price of the basket of goods in 2010 as follows:

(2 x $5) + (5 x $10) + (3 x $20) + (4 x $15) = $20 + $50 + $60 + $60 = $190

Similarly, we can calculate the price of the basket of goods in 2012 as:

(3 x $5) + (5 x $12) + (3 x $24) + (4 x $18) = $15 + $60 + $72 + $72 = $219

The percent increase in prices from 2010 to 2012 is then:

($219 - $190) / $190 x 100% = 29.47%

Rounding to the nearest whole percent, we get approximately 31 percent, which is answer choice B.

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