Table 6-3
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators.

-Refer to Table 6-3. If 2007 is the base year, then the consumer price index was

Question

Table 6-3
The table below pertains to Studious, an economy in which the typical consumer's basket consists of 5 books and 10 calculators.
 
-Refer to Table 6-3. If 2007 is the base year, then the consumer price index was

Quizplus · Accepted Answer

To calculate the consumer price index (CPI), we need to first find the cost of the basket in each year using the prices and quantities given. For example, in 2006, the cost of the basket was (5 x $10) + (10 x $5) = $100. Then, we compare the cost of the basket in each year to the cost in the base year (2007) and calculate the CPI using the formula: (Cost of basket in given year / Cost of basket in base year) x 100. Using this method, we find that the CPI was 74.1 in 2006, 100 in 2007 (the base year), and 114.8 in 2008. Therefore, option A is correct.

Table 6-3 The Table Below Pertains to Studious, an Economy in Which