In 1964,one could buy a chili dog and a root beer for $1.25.Today the same chili dog and root beer cost $2.95.Which pair of CPIs would imply that the cost in today's dollars was the same for both meals?

Question

Quizplus · Accepted Answer

To find the equivalent cost in today's dollars, the ratio of today's CPI to the 1964 CPI should equal the ratio of today's price to the 1964 price. For choice A, 141.6/60 = 2.36, which matches the price ratio 2.95/1.25 = 2.36.

In 1964,one Could Buy a Chili Dog and a Root