Question

(old number 14) The typical family on the Planet Econ consumes 12 pizzas, 5 pair of jeans, and 30 gallons of milk. In 2016, pizza cost $12 each, jeans cost $50 per pair, and milk costs $4 per gallon. In 2017, the price of pizzas increased to $15 each, while the price of jeans and milk remained the same. Between 2016 and 2017, a typical family's cost of living:

a. Decreased by 7%
b. Increased by 7%
c. Remained the Same
d. Increased by 25%

Answer 1

Ans: b) Increased by 7%

Explanation:

Cost of living in the year 2016 = ( 12 * $12 ) + ( 5 * $50 ) + ( 30 *$4 )

= $ 144 + $250 + $120 = $ 514

Cost of living in the year 2017 = ( 12 * $15 ) + ( 5 * $50 ) + ( 30 *$4 )

= $ 180 + $250 + $120 = $ 550

Between 2016 and 2017 , cost of living increases by ;

= {( $550 - $514 ) / $514 }*100

= ( 36 / 514 ) *100

= 7.003 % or 7%