Question

Assume that 2015 is the base year.
Assuming that the base year basket of goods contains 40 notebooks, 1 iPad and 200 muffins, what is the Consumer Price Index for 2016?

Year	Price of a Notebook	Quantity of Notebooks	Price of an iPad	Quantity of iPads	Price of a Muffin	Quantity of Muffins
2015	$2.50	75	$780	8	$1.00	400
2016	$3.00	90	$1500	3	$1.00	350

Answer 1

	Base Year			2016
Notebook	Quantity	Price	PQ	Price	PQ
Notebook	40	$ 2.50	$ 100	$ 3.00	$ 120
iPad	1	$ 780	$ 780	$ 1500	$ 1,500
Muffin	200	$ 1.00	$ 200	$ 1.00	$ 200
			$ 1,080		$ 1,820

Costof Basket2016 100 CPI2016 Costof Basket2015

1820100 CPI2016 1080

1820100 CPI2016 1080

CPI2016 =1.685185 x 100

CPI2016168.5185

CPI2016 168.52

Here quantity is assumed as provided in the question therefore have used 40 notebooks, 1 ipad and 200 muffins.

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