Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs.
-Refer to Table 24-7. If the base year is 2010, then the consumer price index is
A)100 in 2009, 109 in 2010, and 115 in 2011.
B)95.90 in 2009, 100 in 2010, and 107.44 in 2011.
C)90.91 in 2009, 100 in 2010, and 106.36 in 2011.
D)88.82 in 2009, 100 in 2010, and 107.44 in 2011.

Question

Table 24-7. The table below applies to an economy with only two goods - hamburgers and hot dogs. The fixed basket consists of 4 hamburgers and 8 hot dogs. 
-Refer to Table 24-7. If the base year is 2010, then the consumer price index is
A)100 in 2009, 109 in 2010, and 115 in 2011. 
B)95.90 in 2009, 100 in 2010, and 107.44 in 2011. 
C)90.91 in 2009, 100 in 2010, and 106.36 in 2011. 
D)88.82 in 2009, 100 in 2010, and 107.44 in 2011.

Quizplus · Accepted Answer

The base year CPI is always 100. The CPI for other years is calculated relative to the base year. The given choice C correctly reflects the CPI values with 2010 as the base year.