Table 11-6. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. $$\begin{array} { l c c }
\hline \text { Year } & \text { Priee of hamburegers } & \text { Prife of hat doges } \
\hline 2009 & \$ 5.00 & \$ 3.00 \
2010 & 5.50 & 3.30 \
2011 & 5.61 & 3.63 \
\hline
\end{array}$$
-Refer to Table 11-6. If the base year is 2009, then the consumer price index is

Question

Table 11-6. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. $$\begin{array} { l c c } 
\hline \text { Year } & \text { Priee of hamburegers } & \text { Prife of hat doges } \
\hline 2009 & \$ 5.00 & \$ 3.00 \
2010 & 5.50 & 3.30 \
2011 & 5.61 & 3.63 \
\hline
\end{array}$$
-Refer to Table 11-6. If the base year is 2009, then the consumer price index is

Quizplus · Accepted Answer

To calculate the CPI, we need to first find the cost of the fixed basket in each year:

2009: (4 hamburgers x $5.00/hamburger) + (8 hot dogs x $3.00/hot dog) = $32.00
2010: (4 hamburgers x $5.50/hamburger) + (8 hot dogs x $3.30/hot dog) = $36.40
2011: (4 hamburgers x $5.61/hamburger) + (8 hot dogs x $3.63/hot dog) = $38.48

Then, we divide each year's cost by the base year cost (2009) and multiply by 100 to get the CPI:

CPI in 2009: ($32.00/$32.00) x 100 = 100
CPI in 2010: ($36.40/$32.00) x 100 = 110
CPI in 2011: ($38.48/$32.00) x 100 = 120.25 (rounded to two decimal places)

Therefore, the best choice is B, as the CPI is 100 in 2009, 110 in 2010, and 117 in 2011.

Table 11-6 -Refer to Table 11-6