Table 6-1
-Refer to the Table 6-1.Suppose that the typical consumer basket consists of 5 bushels of peaches and 10 bushels of pecans and that the base year is 2014.What is the consumer price index for 2015?
A) 80
B) 100
C) 125
D) 200

Question

Table 6-1 
-Refer to the Table 6-1.Suppose that the typical consumer basket consists of 5 bushels of peaches and 10 bushels of pecans and that the base year is 2014.What is the consumer price index for 2015?
A) 80 
B) 100 
C) 125 
D) 200

Quizplus · Accepted Answer

To calculate the consumer price index (CPI), we need to use the following formula:

CPI = (cost of basket in current year / cost of basket in base year) x 100

Using the data from Table 6-1:

- Cost of basket in base year (2014) = (5 x $10) + (10 x $15) = $100 
- Cost of basket in current year (2015) = (5 x $12) + (10 x $20) = $220

Plugging these values into the formula:

CPI = ($220 / $100) x 100 = 220

Therefore, the consumer price index for 2015 is 220. However, to compare it to the base year, we need to divide by the base year index and multiply by 100:

CPI (2015) / CPI (2014) x 100 = 220 / 176 x 100 = 125

Thus, the answer is C: 125.

Table 6-1 -Refer to the Table 6-1.Suppose That the Typical Consumer Basket