Table 6-5
This table pertains to an economy with only two goods: books and calculators.The fixed basket consists of 5 books and 10 calculators.
-Refer to the Table 6-5.Using 2013 as the base year,what is the consumer price index?

Question

Quizplus · Accepted Answer

The CPI is calculated as the cost of the fixed basket of goods in the current year divided by the cost of the fixed basket in the base year, multiplied by 100. In 2013, the cost of the fixed basket is 5 * $10 + 10 * $20 = $200. In 2014, the cost of the fixed basket is 5 * $15 + 10 * $25 = $270. In 2015, the cost of the fixed basket is 5 * $20 + 10 * $30 = $310. Therefore, the CPI is 100 in 2013, 135 in 2014, and 155 in 2015.

Table 6-5 This Table Pertains to an Economy with Only Two Goods