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Table: Peanut Butter and Jelly

-(Table: Peanut Butter and Jelly) Look at the table Peanut Butter and Jelly. Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly. If 2012 is the base year, what is the value of the price index in 2014?
A)122.5
B)111.25
C)90
D)81.6

Question

Use the following to answer questions :
Table: Peanut Butter and Jelly
 
-(Table: Peanut Butter and Jelly) Look at the table Peanut Butter and Jelly. Suppose a market basket consists of 20 jars of peanut butter and 10 jars of jelly. If 2012 is the base year, what is the value of the price index in 2014?
A)122.5 
B)111.25 
C)90 
D)81.6

Quizplus · Accepted Answer

The price index is calculated by comparing the cost of the market basket in 2014 to the cost in the base year (2012). If the cost in 2014 is 22.5% higher than in 2012, the price index would be 122.5.

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