Suppose Crystal Pepsi is removed from the soft drink price index.
Using the table provided, what is the total cost of the entire 2020 basket?
| Item | Quantity in Basket | 1990 Price | Cost in 1990 Basket | 2020 price | Cost in 2020 Basket |
| Sparkling water | 2 | $0.50 | $1.00 | $1.00 | $2.00 |
| Tab cola | 1 | $1.00 | $1.00 | $2.00 | $2.00 |
| Surge | 4 | $2.50 | $10.00 | $2.00 | $8.00 |
| Total cost of basket | 1990 | $22.50 | _____ |
Group of answer choices
$12.00
$12.50
$24.50
$3.50
2. Suppose Crystal Pepsi is removed from the soft drink price index.
Using the table provided, what is the approximate value of the price index in 2020?
0.96
0.53
0.29
1
Answer:
1]
Total Cost entire 2020 baskets = Sparking water cost + Tab Cola cost + Surge Cost
= $2.00 + $2.00 + $8.00
= $12.00
Hence correct option: A] $12.00
2]
Total cost of basket in 2020 = $12
Total cost of basket in 1990 = $22.50 (Given)
Price index in 2020 = [(Total Cost of basket in 2020) / (Total Cost of basket in 1990)]
Price Index in 2020 = [($12/ $22.50)]
Price index of 2020 = 0.53
Hence correct option: B] 0.53
Suppose Crystal Pepsi is removed from the soft drink price index. Using the table provided, what...