$$\begin{array} { | c | l | l | l | }
\hline && { 2008 } & 2009 \
\hline \text { Item } & \text { Quantity } & \text { Frice } & \text { Price } \
\hline \text { Movie tickets } & 4 & \$ 5.00 & \$ 7.50 \
\hline \begin{array} { c }
\text { Bags of } \
\text { popcorn }
\end{array} & 2 & \$ 3.00 & \$ 3.00 \
\hline \text { Drinks of soda } & 4 & \$ 1.00 & \$ 1.50 \
\hline
\end{array}$$
-The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange is $1.00 and the price of a pen is $0.75. This year, urban consumers each buy 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is__________ .
A) 140
B) 160
C) 1.60
D) 62.5

Question

$$\begin{array} { | c | l | l | l | } 
\hline && { 2008 } & 2009 \
\hline \text { Item } & \text { Quantity } & \text { Frice } & \text { Price } \
\hline \text { Movie tickets } & 4 & \$ 5.00 & \$ 7.50 \
\hline \begin{array} { c } 
\text { Bags of } \
\text { popcorn }
\end{array} & 2 & \$ 3.00 & \$ 3.00 \
\hline \text { Drinks of soda } & 4 & \$ 1.00 & \$ 1.50 \
\hline
\end{array}$$
-The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange is $1.00 and the price of a pen is $0.75. This year, urban consumers each buy 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is__________ .
A) 140
B) 160
C) 1.60
D) 62.5

Quizplus · Accepted Answer

The CPI is calculated by comparing the cost of the basket in the current year to the cost in the base year. The base year cost is (400 * $1.00) + (800 * $0.75) = $1000. The current year cost is (400 * $2.00) + (800 * $1.00) = $1600. The CPI is ($1600 / $1000) * 100 = 160.

-The CPI Basket Contains 400 Oranges and 800 Pens