(Table: Peanut Butter and Jelly Prices) Use Table: Peanut Butter and Jelly Prices. Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly. If 2017 is the base year, what is the value of the price index in 2018? $$\begin{array} { | l | l | l | l | }
\hline & \text { Price in 2017 } & \text { Price in 2018 } & \text { Price in 2019 } \
\hline \text { Peanut butter } & \$ 1.00 & \$ 1.10 & \$ 1.20 \
\hline \text { Jelly } & \$ 2.00 & \$ 2.25 & \$ 2.50 \
\hline
\end{array}$$
A)0
B)0.
C)90
D)90.
E)100.
F)100
G)111.25.
H)111.25

Question

(Table: Peanut Butter and Jelly Prices) Use Table: Peanut Butter and Jelly Prices. Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly. If 2017 is the base year, what is the value of the price index in 2018? $$\begin{array} { | l | l | l | l | } 
\hline & \text { Price in 2017 } & \text { Price in 2018 } & \text { Price in 2019 } \
\hline \text { Peanut butter } & \$ 1.00 & \$ 1.10 & \$ 1.20 \
\hline \text { Jelly } & \$ 2.00 & \$ 2.25 & \$ 2.50 \
\hline
\end{array}$$
A)0
B)0.
C)90
D)90.
E)100.
F)100
G)111.25.
H)111.25

Quizplus · Accepted Answer

To find the value of the price index in 2018, we need to calculate the cost of the market basket in 2018 and divide it by the cost of the same market basket in the base year (2017) and then multiply by 100.

Cost of the market basket in 2017 = (20 x $2.50) + (10 x $3) = $65 
Cost of the market basket in 2018 = (20 x $3) + (10 x $3.50) = $80

Price index = ($80 / $65) x 100 = 123.08 (rounded to two decimal places)

Therefore, the closest answer choice is H) 111.25, which is obtained by rounding the price index to one decimal place.