Table 6-5
This table pertains to an economy with only two goods: books and calculators. The fixed basket consists of 5 books and 10 calculators.
$$\begin{array} { | l | c | c }
\hline \text { Year } & \text { price of Bouks } & \text { price of Calculators } \
\hline 2011 & \$ 24 & \$ 8 \
\hline 2012 & \$ 30 & \$ 12 \
\hline 2013 & \$ 32 & \$ 15 \
\hline
\end{array}$$
-Refer to the Table 6-5.Using 2011 as the base year,what is the consumer price index?

Question

Table 6-5
This table pertains to an economy with only two goods: books and calculators. The fixed basket consists of 5 books and 10 calculators.
 $$\begin{array} { | l | c | c } 
\hline \text { Year } & \text { price of Bouks } & \text { price of Calculators } \
\hline 2011 & \$ 24 & \$ 8 \
\hline 2012 & \$ 30 & \$ 12 \
\hline 2013 & \$ 32 & \$ 15 \
\hline
\end{array}$$
-Refer to the Table 6-5.Using 2011 as the base year,what is the consumer price index?

Quizplus · Accepted Answer

The CPI is calculated by dividing the cost of the fixed basket in the current year by the cost of the fixed basket in the base year and multiplying by 100. In 2011, the cost of the fixed basket is 5 x $24 + 10 x $8 = $160. In 2012, the cost of the fixed basket is 5 x $30 + 10 x $12 = $210. In 2013, the cost of the fixed basket is 5 x $32 + 10 x $15 = $235. Therefore, the CPI is 100 in 2011, 135 in 2012, and 155 in 2013.

Table 6-5 This Table Pertains to an Economy with Only

Table 6-5
This Table Pertains to an Economy with Only