Table 6-3
In the country of Shem, the CPI is calculated using a market basket consisting of 5 apples, 4 loaves of bread, 3 robes, and 2 litres of gasoline. The per-unit prices of these goods have been as follows:
$$\begin{array} { | l | l | l | l | l | }
\hline \text { Year } & \text { Apples } & \text { Bread } & \text { Rabes } & \text { Gasdline } \
\hline 2010 & \mathbf { \$ 1 . 0 0 } & \mathbf { \$ 2 . 0 0 } & \mathbf { \$ 1 0 . 0 0 } & \mathbf { \$ 1 . 0 0 } \
\hline 2011 & \mathbf { \$ 1 . 0 0 } & \mathbf { \$ 1 . 5 0 } & \mathbf { \$ 9 . 0 0 } & \mathbf { \$ 1 . 5 0 } \
\hline 2002 & \mathbf { \$ 2 . 0 0 } & \mathbf { \$ 2 . 0 0 } & \mathbf { \$ 1 1 . 0 0 } & \mathbf { 4 2 . 0 0 } \
\hline 2013 & \mathbf { \$ 3 . 0 0 } & \mathbf { 4 3 0 0 } & \mathbf { 1 5 . 0 0 } & \mathbf { 4 } .50 \
\hline
\end{array}$$
-Refer to the Table 6-3.What was the inflation rate,as measured by the CPI,between 2011 and 2012?

Question

Table 6-3
In the country of Shem, the CPI is calculated using a market basket consisting of 5 apples, 4 loaves of bread, 3 robes, and 2 litres of gasoline. The per-unit prices of these goods have been as follows:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Year } & \text { Apples } & \text { Bread } & \text { Rabes } & \text { Gasdline } \
\hline 2010 & \mathbf { \$ 1 . 0 0 } & \mathbf { \$ 2 . 0 0 } & \mathbf { \$ 1 0 . 0 0 } & \mathbf { \$ 1 . 0 0 } \
\hline 2011 & \mathbf { \$ 1 . 0 0 } & \mathbf { \$ 1 . 5 0 } & \mathbf { \$ 9 . 0 0 } & \mathbf { \$ 1 . 5 0 } \
\hline 2002 & \mathbf { \$ 2 . 0 0 } & \mathbf { \$ 2 . 0 0 } & \mathbf { \$ 1 1 . 0 0 } & \mathbf { 4 2 . 0 0 } \
\hline 2013 & \mathbf { \$ 3 . 0 0 } & \mathbf { 4 3 0 0 } & \mathbf { 1 5 . 0 0 } & \mathbf { 4 } .50 \
\hline
\end{array}$$
-Refer to the Table 6-3.What was the inflation rate,as measured by the CPI,between 2011 and 2012?

Quizplus · Accepted Answer

Using the CPI formula:
CPI = (price of market basket in specific year / price of market basket in base year) x 100

To find the inflation rate between 2011 and 2012, we need to calculate the CPI for both years and then find the percentage change.

CPI in 2011:
(5 x 1.00) + (4 x 1.50) + (3 x 9.00) + (2 x 1.50) = 41.00
CPI in 2012:
(5 x 2.00) + (4 x 2.00) + (3 x 11.00) + (2 x 4.20) = 54.40

Inflation rate = ((CPI in 2012 – CPI in 2011) / CPI in 2011) x 100
Inflation rate = ((54.40 – 41.00) / 41.00) x 100
Inflation rate = 33 percent

The closest option is B, 34.1 percent.

Table 6-3 in the Country of Shem, the CPI Is

Table 6-3
in the Country of Shem, the CPI Is