The table given below reports the price of soda over four consecutive years.
Table 5.7
$\begin{array}{c}
\text { Price Data }\
\begin{array}{|c|c|c|}
\hline \text { Year } & \text { Base-Year Soda Price } & \text { Current Soda Price } \
\hline 1 \text { (base year) } & \$ 0.30 & \$ 0.30 \
\hline 2 & \$ 0.30 & \$ 0.45 \
\hline 3 & \$ 0.30 & \$ 0.55 \
\hline 4 & \$ 0.30 & \$ 0.65 \
\hline
\end{array}
\end{array}$
-Refer to Table 5.7. Compute the price index for the base year.

Question

The table given below reports the price of soda over four consecutive years.
Table 5.7
 $\begin{array}{c}
\text { Price Data }\
\begin{array}{|c|c|c|}
\hline \text { Year } & \text { Base-Year Soda Price } & \text { Current Soda Price } \
\hline 1 \text { (base year) } & \$ 0.30 & \$ 0.30 \
\hline 2 & \$ 0.30 & \$ 0.45 \
\hline 3 & \$ 0.30 & \$ 0.55 \
\hline 4 & \$ 0.30 & \$ 0.65 \
\hline
\end{array}
\end{array}$
-Refer to Table 5.7. Compute the price index for the base year.

Quizplus · Accepted Answer

Price index for the base year is always 100. It represents the change in prices from the base year to other years. Therefore, the price index for the base year in this case is 100.

The Table Given Below Reports the Price of Soda Over