Question

Commodity Market Basket Quantity 10 gallon 10 dozen 10 loaves 2010 Price per Unit 2.00 2.00 2.00 Cost of Market2018 Price Milk Eggs Bread Basket in 2010 20.00 20.00 20.00 per Unit 2.50 3.00 3.00 Cost of Market Basket in 2018 25.00 30.00 30.00 If 2010 is the base year in the table shown above, what is the price index for the year 2018? O A. 100.0 B. 114.7 C. 141.7 O D. 147.1

Answer 1

Commodity	Market Basket Quantity	2010 Price Per Unit	Cost of Market Basket in 2010	2018 Price Per Unit	Cost of Market Basket in 2018
Milk	10 Gallon	2	20	2.5	25
Eggs	10 Dozen	2	20	3	30
Bread	10 loaves	2	20	3	30
Total			60		85

Cost of the market basket in 2010 = 60 Base Year

Cost of the market basket in 2018 = 85

If 2010 is the base year in the table, what is the price index for the year 2018?

Price index =

Cost of the market basket in the given year (2018)/Cost of the market basket in the base year (2010)*100

Price index = 85/60*100 = 141.67 or 141.7

Answer = (c) 141.7