Use the table below to answer the following questions.
Table 6-1

-Refer to Table 6-1. Suppose that the typical consumer basket consists of 5 bushels of peaches and 10 bushels of pecans and that the base year is 2010. What is the consumer price index for 2011?

Question

Use the table below to answer the following questions.
Table 6-1
 
-Refer to Table 6-1. Suppose that the typical consumer basket consists of 5 bushels of peaches and 10 bushels of pecans and that the base year is 2010. What is the consumer price index for 2011?

Quizplus · Accepted Answer

To calculate the consumer price index for 2011, we need to use the following formula:

CPI = (cost of basket in current year/cost of basket in base year) x 100

Using the prices given in the table, we can calculate the cost of the basket in each year:

2010 cost = (5 x 10) + (10 x 20) = 150
2011 cost = (5 x 12) + (10 x 24) = 180

Now we can plug these values into the formula to find the CPI:

CPI = (180/150) x 100 = 120

Therefore, the consumer price index for 2011 is 120, which is closest to the given option C (125).

Use the Table Below to Answer the Following Questions