Table 11-5
The table below pertains to Napandsnack, an economy in which the typical consumer's basket consists of 2 pillows and 15 hotdogs. $$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Price of a } \
\text { pilldw }
\end{array} & \begin{array} { c }
\text { Price af a } \
\text { Hotdlog }
\end{array} \
\hline 2009 & \$ 40 & \$ 3 \
\hline 2010 & \$ 45 & \$ 4 \
\hline 2011 & \$ 50 & \$ 3 \
\hline
\end{array}$$
-Refer to Table 11-5. If the base year is 2011, then the CPI

Question

Table 11-5
The table below pertains to Napandsnack, an economy in which the typical consumer's basket consists of 2 pillows and 15 hotdogs. $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Price of a } \
\text { pilldw }
\end{array} & \begin{array} { c } 
\text { Price af a } \
\text { Hotdlog }
\end{array} \
\hline 2009 & \$ 40 & \$ 3 \
\hline 2010 & \$ 45 & \$ 4 \
\hline 2011 & \$ 50 & \$ 3 \
\hline
\end{array}$$
-Refer to Table 11-5. If the base year is 2011, then the CPI

Quizplus · Accepted Answer

To calculate the CPI for each year, we use the formula:
$$CPI = \frac{\text{Cost of Basket in Current Year}}{\text{Cost of Basket in Base Year}} \times 100$$
Using 2011 as the base year, we have:
$$CPI_{2009} = \frac{(2 \times \$40) + (15 \times \$3)}{(2 \times \$50) + (15 \times \$3)} \times 100 \approx 78$$
$$CPI_{2010} = \frac{(2 \times \$45) + (15 \times \$4)}{(2 \times \$50) + (15 \times \$3)} \times 100 \approx 86$$
$$CPI_{2011} = \frac{(2 \times \$50) + (15 \times \$3)}{(2 \times \$50) + (15 \times \$3)} \times 100 = 100$$
Therefore, the CPI increased from 2009 to 2010 (78 to 86) and decreased from 2010 to 2011 (86 to 100). Thus, the correct answer is B.

Table 11-5 the Table Below Pertains to Napandsnack, an Economy

Table 11-5
the Table Below Pertains to Napandsnack, an Economy