$$\begin{array} { | c | c | c | }
\hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \
\hline 1 & 3 & \$ 3 \
\hline 2 & 4 & 4 \
\hline 3 & 6 & 5 \
\hline 4 & 7 & 7 \
\hline 5 & 8 & 8 \
\hline
\end{array}$$ Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a ?ve-year period are shown in the table. The price index for year 1 is
A) 140.
B) 40.
C) 167.
D) 60.

Question

$$\begin{array} { | c | c | c | } 
\hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \
\hline 1 & 3 & \$ 3 \
\hline 2 & 4 & 4 \
\hline 3 & 6 & 5 \
\hline 4 & 7 & 7 \
\hline 5 & 8 & 8 \
\hline
\end{array}$$ Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a ?ve-year period are shown in the table. The price index for year 1 is
A) 140.
B) 40.
C) 167.
D) 60.

Quizplus · Accepted Answer

The price index for year 1 is calculated as (Price in Year 1 / Price in Base Year) * 100 = (3 / 5) * 100 = 60.

Assume an Economy That Makes Only One Product and That