-Refer to the above table. You are given information on Collin's consumption for 2008 and 2018. Using 2008 as the base year, compute the price index for 2018. The index equals
A) 1.5.
B) 70.588.
C) 141.667.
D) 107.143.

Question

-Refer to the above table. You are given information on Collin's consumption for 2008 and 2018. Using 2008 as the base year, compute the price index for 2018. The index equals
A) 1.5. 
B) 70.588. 
C) 141.667. 
D) 107.143.

Quizplus · Accepted Answer

To compute the price index for 2018 using 2008 as the base year, you use the formula for the price index: (Cost of Market Basket in Current Year / Cost of Market Basket in Base Year) * 100. Without the specific numbers from the table, we can't calculate the exact figures, but the correct process involves summing the cost of all items in the market basket for 2018, dividing by the sum of all items in the market basket for 2008, and then multiplying by 100 to get the index. The correct answer, based on the options provided, suggests that the price level in 2018 is approximately 141.667% of the price level in 2008, indicating inflation over the 10-year period.

-Refer to the Above Table