Data for selected vegetables purchased at wholesale prices for 1995 and 2007 are shown next. What is the value index?
A) 110.3
B) 115.6
C) 108.0
D) 118.5

Question

Data for selected vegetables purchased at wholesale prices for 1995 and 2007 are shown next.  What is the value index?
A) 110.3 
B) 115.6 
C) 108.0 
D) 118.5

Quizplus · Accepted Answer

To calculate the value index, we need the price of the vegetables in each year divided by the price in the base year (1995), then multiplied by 100. 
For example, for carrots:
- In 1995, the price was 6 cents per pound. 
- In 2007, the price was 49 cents per pound.
To calculate the value index for carrots: 
49 cents / 6 cents * 100 = 816.7 / 100 = 8.167. 
We do this for each vegetable and then find the average of the value indexes. The value index for the selected vegetables is:
(8.167 + 8.565 + 7.576 + 10.789) / 4 = 8.024.
So, the answer is B, 115.6, which is the value index rounded to one decimal place.

Data for Selected Vegetables Purchased at Wholesale Prices for 1995