Homework SourseQuestion 9 CPI This question relates to Course Learning Obje
Question 9: CPI
This question relates to Course Learning Objective 2 and is worth 10 points.
Using the table below, compute the consumer price index (CPI) in 2007 using 2006 as the base year. Show all your work.
Good
Quantity
2006 Price
2006 Total Expenditure
2007 Price
2007 Total Expenditure
Bagels
100
$1.00
$1.50
Shoes
10
$45.00
$50.00
DVDs
20
$10.00
$12.00
| Good | Quantity | 2006 Price | 2006 Total Expenditure | 2007 Price | 2007 Total Expenditure |
|---|---|---|---|---|---|
| Bagels | 100 | $1.00 | $1.50 | ||
| Shoes | 10 | $45.00 | $50.00 | ||
| DVDs | 20 | $10.00 | $12.00 |
Solution
Good
Quantity
2006 Price
2006 Total Expenditure
2007 Price
2007 Total Expenditure
Bagels
100
$1.00
$100
$1.50
$150
Shoes
10
$45.00
$450
$50.00
$500
DVDs
20
$10.00
$200
$12.00
$240
The consumer price index (CPI) in 2007 using 2006 as the base year.has been calculated below:
The Consumer price index (CPI) of 2007= Total Expenditure 2007 (P of 2007 * Q of 2006)
= 150+ 500+240
=$890
| Good | Quantity | 2006 Price | 2006 Total Expenditure | 2007 Price | 2007 Total Expenditure |
|---|---|---|---|---|---|
| Bagels | 100 | $1.00 | $100 | $1.50 | $150 |
| Shoes | 10 | $45.00 | $450 | $50.00 | $500 |
| DVDs | 20 | $10.00 | $200 | $12.00 | $240 |
