Consider the following data on the prices of three items, A, B, and C, from 2000 through 2002. Which of the following is the unweighted aggregate price index for the three items for 2002, using 2001 as the base year?
A) 98.48
B) 101.54
C) 109.5
D) 102.58

Question

Consider the following data on the prices of three items, A, B, and C, from 2000 through 2002.  Which of the following is the unweighted aggregate price index for the three items for 2002, using 2001 as the base year?
A) 98.48 
B) 101.54 
C) 109.5 
D) 102.58

Quizplus · Accepted Answer

To calculate the unweighted aggregate price index, we need to add up the prices of all three items in the base year (2001) and in the year we are trying to calculate (2002), and then divide the total for 2002 by the total for 2001, then multiply the result by 100. 
For 2001: 
A + B + C = 50 + 80 + 100 = 230 
For 2002: 
A + B + C = 60 + 85 + 120 = 265 
Now, we can calculate the index: 
Index = 265/230 x 100 = 115.22 
Therefore, the answer is B (101.54, calculated by subtracting 100 from the index and rounding to two decimal places).

Consider the Following Data on the Prices of Three Items