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. Between 2010 and 2011, the cost of living increased by
A)5.30 percent.
B)6.36 percent.
C)7.78 percent.
D)We need to know the base year in order to answer this question.

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. Between 2010 and 2011, the cost of living increased by
A)5.30 percent. 
B)6.36 percent. 
C)7.78 percent. 
D)We need to know the base year in order to answer this question.

Quizplus · Accepted Answer

The cost of living increase is calculated using the Consumer Price Index (CPI). The percentage increase is found by taking the difference in CPI between the two years, dividing by the CPI of the earlier year, and multiplying by 100. The given percentage increase is 6.36 percent.