Answered

Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Join our platform to connect with experts ready to provide detailed answers to your questions in various areas. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.


The table below pertains to a small agricultural economy where the typical consumer's basket
consists of 10 pounds of apples and 20 pounds of oranges. If 2017 is the base year, then the CPI
for 2018 was?

Year
Price of Apples
Price of Oranges
2017
$2.0 per pound (Apples)
$2.00 per pound (Oranges)
2018
$1.5 per pound (Apples)
$3.00 per pound (Oranges)

A) 125.0
B) 100.0
C) 95.0
D) 110.0

Sagot :

fichoh

Answer:

125

Explanation:

Given the table:

Year

Price of Apples

Price of Oranges

2017

$2.0 per pound (Apples)

$2.00 per pound (Oranges)

2018

$1.5 per pound (Apples)

$3.00 per pound (Oranges

Consumer price index is obtained using the formular :

CPI = (Cost of market basket In current period / Cost of market basket in base period) * 100

Current period (2018):

Cost of 10 pounds of apple and 20 pounds of oranges :

($1.5 * 10) + ($3 * 20) = $15 + $60 = $75

Base year (2017)

Cost of 10 pounds of apple and 20 pounds of oranges :

($2 * 10) + ($2 * 20) = $20 + $40 = $60

Hence,

CPI = ($75 / $60) * 100

CPI = 1.25 * 100

CPI = 125

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.