Question 1 In 2019 and in 2021, consumers bought only books and pens, and the table shows the data. 2019 2021 Item Price Quantity Price Quantity Books $2 7 $6 6 Pens $6 4 $8 8 The reference base period is 2019, and 2019 is also the year of the Consum Expenditure Survey. Calculate the CPI in 2021.
Question 1 In 2019 and in 2021, consumers bought only books and pens, and the table shows the data. 2019 2021 Item Price Quantity Price Quantity Books $2 7 $6 6 Pens $6 4 $8 8 The reference base period is 2019, and 2019 is also the year of the Consum Expenditure Survey. Calculate the CPI in 2021.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The CPI in 2021 equals _______.
A.
51.4
B.
100.0
C.
74.0
D.
194.7
Screenshotted

Transcribed Image Text:Question 1
In 2019 and in 2021, consumers bought only books and pens, and the table
shows the data.
2019
2021
Item Price Quantity Price Quantity
Books $2
7
6
Pens $6
4
8
$6
$8
The reference base period is 2019, and 2019 is also the year of the Consumer
Expenditure Survey.
Calculate the CPI in 2021.
Expert Solution

Step 1
CPI refers to Consumer Price Index. CPI measures the total cost of goods and services purchased by a typical urban consumer. The goods and services are part of market basket representing typical consumer goods. CPI plays an important role in determining inflation rate.
CPI of current year = Cost of market basket in the current year / Cost of market basket in base year * 100
Step by step
Solved in 2 steps
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