Using 2016 as the base year, the 2018 value of a simple price index for the following price data is ___.
A)77.60
B)114.13
C)160.58
D)99.30
E)100.00

Question

Using 2016 as the base year, the 2018 value of a simple price index for the following price data is ___. 
A)77.60 
B)114.13 
C)160.58 
D)99.30 
E)100.00

Quizplus · Accepted Answer

To calculate the simple price index, we need to take the price of each item in 2018 and divide it by the price of the same item in 2016. Then we sum up all of these ratios and multiply by 100 to get the index value.

Here are the calculations:

Item A: ($2.49/$2.39) = 1.0427
Item B: ($5.99/$5.19) = 1.1549
Item C: ($1.79/$1.89) = 0.9524
Item D: ($0.99/$1.09) = 0.9083

Total ratio: 1.0427 + 1.1549 + 0.9524 + 0.9083 = 4.0583

Index value: 4.0583 x 100 = 405.83

Therefore, the 2018 value of the simple price index is 405.83. However, we need to compare this to the base year value of 100 to determine the percentage change in prices.

Percentage change = (405.83 - 100)/100 x 100% = 305.83%

Therefore, the answer is B) 114.13, which is the index value rounded to two decimal places.

Using 2016 as the Base Year, the 2018 Value of a Simple