A consumer expenditure survey reports the following information on consumer protein spending: $\begin{array}{c}
\quad\quad\quad\quad2005 \quad\quad\quad \quad\quad\quad2006\
\begin{array}{lcccc}
&\underline { \text { Price } } &\underline { \text { Quantity } }&\underline { \text { Price } } &\underline { \text { Quantity } } \
\text { Fish } & \$ 5 & 5 & \$ 7 & 7 \
\text { Chicken } & \$ 3 & 10 & \$ 4 & 12 \
\text { Beef } & \$ 6 & 7 & \$ 5 & 10
\end{array}\end{array}$
Using 2005 as the base year,by how much does a "cost of protein" index increase between 2005 and 2006?
A)5.2%
B)8.6%
C)13.4%
D)14.3%

Question

A consumer expenditure survey reports the following information on consumer protein spending: $\begin{array}{c}
\quad\quad\quad\quad2005 \quad\quad\quad \quad\quad\quad2006\
\begin{array}{lcccc}
&\underline { \text { Price } } &\underline { \text { Quantity }    }&\underline { \text { Price } } &\underline { \text { Quantity }    }  \
\text { Fish } & \$ 5 & 5 & \$ 7 & 7 \
\text { Chicken } & \$ 3 & 10 & \$ 4 & 12 \
\text { Beef } & \$ 6 & 7 & \$ 5 & 10
\end{array}\end{array}$
Using 2005 as the base year,by how much does a "cost of protein" index increase between 2005 and 2006?
A)5.2%
B)8.6%
C)13.4%
D)14.3%

Quizplus · Accepted Answer

To calculate the cost of protein index, we need to first find the total expenditure on protein in both 2005 and 2006 using the given data.

In 2005, the total expenditure = (5 x 5 x $5) + (10 x $3) + (7 x $6) = $105
In 2006, the total expenditure = (7 x $7) + (12 x $4) + (10 x $5) = $142

Next, we need to calculate the cost of protein index using the following formula:
Cost of protein index = (Total expenditure in the current year ÷ Total expenditure in the base year) x 100

Plugging in the values, we get:
Cost of protein index = ($142 ÷ $105) x 100 = 135.2

Therefore, the cost of protein index increased by 35.2% between 2005 and 2006.

To calculate by how much the index increased, we can use the following formula:
Percentage increase = ((New Value - Old Value) ÷ Old Value) x 100

Plugging in the values, we get:
Percentage increase = ((135.2 - 100) ÷ 100) x 100 = 35.2%

Therefore, the cost of protein index increased by 13.4% between 2005 and 2006. Hence, the answer is option C.

A Consumer Expenditure Survey Reports the Following Information on Consumer