-The Tables Above Give the Purchases of an Average Consumer

question 343

Essay

$$\begin{array} { | l | c | c | } \hline { \text { Item } } & \begin{array} { l } \text { Quantity } \\( 2010 )\end{array} & \begin{array} { l } \text { Price } \\( 2010 )\end{array} \\\hline \text { Shampoo } & 25 & \$ 2.35 \\\hline \text { Pizza } & 15 & \$ 7.50 \\\hline\end{array}$$
$$\begin{array} { | l | c | c | } \hline { \text { Item } } & \begin{array} { l } \text { Quantity } \\( 2010 )\end{array} & \begin{array} { l } \text { Price } \\( 2011 )\end{array} \\\hline \text { Shampoo } & 25 & \$ 2.50 \\\hline \text { Pizza } & 15 & \$ 7.75 \\\hline\end{array}$$
-The tables above give the purchases of an average consumer in a small economy. These consumers purchase only shampoo and pizza.) Suppose 2010 is the reference base period.
a) What is the cost of the CPI basket in 2010 and 2011?
b) What is the CPI in 2010 and in 2011?
c) What is the inflation rate between 2010 and 2011?

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Definitions:

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