Table 13-11
$\begin{array}{|l|r|r|r|r|r|}
\hline &\text { Ouantity } & \text { Price } & \text { Expenditure } & \text { Price }& \text { Expenditure (on base year} \
\text { Product } & \text { (2013) } & (2013) & {(2013)} & \text { (2018) } & \text { quantities) (2018) } \
\hline \text { Hair cuts } & 6 & \$ 50 & \$ 300 & \$ 70 &\$ 420 \
\hline \text { Backpacks } & 4 & 25 & 100 & 30 &120 \
\hline \text { Tacos } & 100 & 1 & 100 & 5 & 500\
\hline \text { Total } & & & \$ 500 & &\mathbf{\$ 1 , 0 4 0}\
\hline
\end{array}$
-Refer to Table 13-11.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2013 is the base year,then what is the CPI for 2018?
A) 40.08
B) 100
C) 180
D) 208

Question

Table 13-11
 $\begin{array}{|l|r|r|r|r|r|}
\hline &\text { Ouantity } & \text { Price } & \text { Expenditure } & \text { Price }& \text { Expenditure (on base year} \
\text { Product } & \text { (2013) } & (2013) & {(2013)} & \text { (2018) } & \text { quantities) (2018) } \
\hline \text { Hair cuts } & 6 & \$ 50 & \$ 300 & \$ 70 &\$ 420 \
\hline \text { Backpacks } & 4 & 25 & 100 & 30 &120 \
\hline \text { Tacos } & 100 & 1 & 100 & 5 & 500\
\hline \text { Total } & & & \$ 500 & &\mathbf{\$ 1 , 0 4 0}\
\hline
\end{array}$
-Refer to Table 13-11.Suppose an economy has only three goods and the typical family purchases the amounts given in the table above.If 2013 is the base year,then what is the CPI for 2018?
A) 40.08
B) 100
C) 180
D) 208

Quizplus · Accepted Answer

To calculate the CPI for 2018, we need to first calculate the expenditure in 2018 using the base year prices.

Expenditure in 2018 = (Base year price x 2018 quantity) 
= (Price in 2013 x Quantity in 2018)

Using this formula, we get:

Expenditure on Hair cuts in 2018 = $50 x 6 = $300 
Expenditure on Backpacks in 2018 = $25 x 4 = $100 
Expenditure on Tacos in 2018 = $1 x 100 = $100

Total expenditure in 2018 = $500

Now we can use the formula for CPI:

CPI = (Expenditure in current year / Expenditure in base year) x 100

CPI for 2018 = ($500 / $500) x 100 = 100

Therefore, the CPI for 2018 is 100, and the correct answer is D.

Table 13-11 -Refer to Table 13-11