Table 11-3
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. $$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Price of a } \
\text { Buak }
\end{array} & \begin{array} { c }
\text { Price of a } \
\text { Calculator }
\end{array} \
\hline 2006 & \$ 24 & \$ 8 \
\hline 2007 & \$ 30 & \$ 12 \
\hline 2008 & \$ 32 & \$ 15 \
\hline
\end{array}$$
-Refer to Table 11-3. If 2008 is the base year, then the consumer price index was

Question

Table 11-3
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators. $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Price of a } \
\text { Buak }
\end{array} & \begin{array} { c } 
\text { Price of a } \
\text { Calculator }
\end{array} \
\hline 2006 & \$ 24 & \$ 8 \
\hline 2007 & \$ 30 & \$ 12 \
\hline 2008 & \$ 32 & \$ 15 \
\hline
\end{array}$$
-Refer to Table 11-3. If 2008 is the base year, then the consumer price index was

Quizplus · Accepted Answer

To find the consumer price index (CPI) for each year, we use the formula:
CPI = (Cost of basket in current year / Cost of basket in base year) x 100
For the base year, the CPI is always 100. Thus, for 2006:
CPI = ((5 x 24) + (10 x 8)) / ((5 x 32) + (10 x 15)) x 100 = 64.5
For 2007:
CPI = ((5 x 30) + (10 x 12)) / ((5 x 32) + (10 x 15)) x 100 = 87.1
For 2008:
CPI = ((5 x 32) + (10 x 15)) / ((5 x 32) + (10 x 15)) x 100 = 100
Therefore, the consumer price index was 64.5 in 2006, 87.1 in 2007, and 100 in 2008 if 2008 is the base year.

Table 11-3 the Table Below Pertains to Studious, an Economy

Table 11-3
the Table Below Pertains to Studious, an Economy