Using the Table Below, Compute the Consumer Price Index CPI)

question 7

Essay

Using the table below, compute the consumer price index CPI) in 2007 using 2006 as the base year. Show all your work.
$$\begin{array} { l l r l r l } \hline \text { Good } & \text { Quantity } & \text { Price } & \begin{array} { l } \text { 2006 Total } \\\text { Expenditure }\end{array} & \text { Price } & \begin{array} { l } \text { 2007 Total } \\\text { Expenditure }\end{array} \\\hline \text { Bagels } & 100 & \$ 1.00 & & \$ 1.50 & \\\text { Shoes } & 10 & \$ 45.00 & & \$ 50.00 & \\\text { DVDs } & 20 & \$ 10.00 & & \$ 12.00 & \\\hline\end{array}$$

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Definitions:

Adam Smith

An 18th-century economist known as the father of modern economics, famous for his theories on free markets and the 'invisible hand'.

International Trade

The exchange of goods and services across international boundaries.

Hourly Wages

Hourly wages are the amount of money workers are paid for each hour of work, often used to compensate employees in various job types for their labor.

Comparable Work

Comparable work refers to jobs that are sufficiently similar in terms of skills, effort, responsibility, and working conditions, used often in discussions about fair wages and equal pay.