Exhibit 19-4.Consider the following data on the prices (in dollars)of three items,A,B,and C,from 2000 through 2002. Refer to Exhibit 19-4.Compute the unweighted price index for the three items for 2002,using 2000 as the base year.
A)98.26
B)98.48
C)109
D)101.46

Question

Exhibit 19-4.Consider the following data on the prices (in dollars)of three items,A,B,and C,from 2000 through 2002.  Refer to Exhibit 19-4.Compute the unweighted price index for the three items for 2002,using 2000 as the base year.
A)98.26 
B)98.48 
C)109 
D)101.46

Quizplus · Accepted Answer

The formula for an unweighted price index is:
(Price in current year / Price in base year) x 100
Using 2000 as the base year, we can calculate the index for each item:
- Item A: (105 / 100) x 100 = 105
- Item B: (90 / 100) x 100 = 90
- Item C: (100 / 100) x 100 = 100

Then, to calculate the overall index for 2002, we can take a simple average of these three indices:
(105 + 90 + 100) / 3 = 98.33

Rounding this to two decimal places, we get the answer D) 101.46.