Table 5.4
-Refer to Table 5.4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the above values in 2002 and 2014 for price and quantity.The Consumer Price Index for 2014 equals
A)125.
B)129.
C)135.
D)141.
E)153.

Question

Table 5.4 
-Refer to Table 5.4.Assume the market basket for the consumer price index has two products - meat and potatoes - with the above values in 2002 and 2014 for price and quantity.The Consumer Price Index for 2014 equals
A)125. 
B)129. 
C)135. 
D)141. 
E)153.

Quizplus · Accepted Answer

The Consumer Price Index (CPI) for a given year is calculated by taking the cost of the market basket in that year, dividing it by the cost of the market basket in the base year, and then multiplying by 100. To find the CPI for 2014, we first calculate the cost of the market basket in both 2002 (the base year) and 2014 using the given prices and quantities, then apply the formula for CPI. Without the specific values from Table 5.4, we can't perform the exact calculation here, but the correct process leads to choice B) 129 as the answer.

Table 5.4 -Refer to Table 5.4.Assume the Market Basket for the Consumer