Suppose an economy has only three goods,and the typical family purchases the amounts given in the following table.If 2012 is the base year,then what is the CPI for 2017? $$\begin{array} { | c | c | c | c | c | c | }
\hline \text { Product } & \begin{array} { c }
\text { Quantity } \
\text { (2012) }
\end{array} & \begin{array} { c }
\text { Price } \
\text { (2012) }
\end{array} & \begin{array} { c }
\text { Expenditures } \
\mathbf { ( 2 0 1 2 ) }
\end{array} & \begin{array} { c }
\text { Price } \
\text { (2017) }
\end{array} & \begin{array} { c }
\text { Expenditures (on base } \
\text { year quantities) (2017) }
\end{array} \
\hline \text { Computers } & 1 & \$ 1500 & \$ 1500 & \$ 1200 & \$ 1200 \
\hline \text { Books } & 10 & \$ 25 & \$ 250 & \$ 30 & \$ 300 \
\hline \text { Burgers } & 50 & \$ 1.00 & \$ 50 & \$ 2.00 & \$ 100 \
\hline \text { Total } & & & \$ 1800 & & \$ 1600 \
\hline
\end{array}$$

Question

Suppose an economy has only three goods,and the typical family purchases the amounts given in the following table.If 2012 is the base year,then what is the CPI for 2017? $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Product } & \begin{array} { c } 
\text { Quantity } \
\text { (2012) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (2012) }
\end{array} & \begin{array} { c } 
\text { Expenditures } \
\mathbf { ( 2 0 1 2 ) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (2017) }
\end{array} & \begin{array} { c } 
\text { Expenditures (on base } \
\text { year quantities) (2017) }
\end{array} \
\hline \text { Computers } & 1 & \$ 1500 & \$ 1500 & \$ 1200 & \$ 1200 \
\hline \text { Books } & 10 & \$ 25 & \$ 250 & \$ 30 & \$ 300 \
\hline \text { Burgers } & 50 & \$ 1.00 & \$ 50 & \$ 2.00 & \$ 100 \
\hline \text { Total } & & & \$ 1800 & & \$ 1600 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The CPI for 2017 is calculated as (Expenditures in 2017 on base year quantities / Expenditures in 2012) * 100 = (1600 / 1800) * 100 = 88.89, which rounds to 89.

Suppose an Economy Has Only Three Goods,and the Typical Family