Table 20-3

-Refer to Table 20-3.Assume the market basket for the consumer price index has three products-Cokes,hamburgers,and CDs-with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals
A)75.
B)93.
C)108.
D)121.

Question

Table 20-3
 
-Refer to Table 20-3.Assume the market basket for the consumer price index has three products-Cokes,hamburgers,and CDs-with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals
A)75. 
B)93. 
C)108. 
D)121.

Quizplus · Accepted Answer

To calculate the Consumer Price Index (CPI) for 2016, we need to compare the cost of the market basket in 2016 to the cost in the base year (2011). Assuming the base year CPI is 100, the CPI for 2016 is calculated as (Cost of basket in 2016 / Cost of basket in 2011) * 100. The given options suggest that the correct calculation results in a CPI of 121.

Table 20-3 -Refer to Table 20-3.Assume the Market Basket for the Consumer