Suppose an Economy Has Only Three Goods and the Typical

question 184

Multiple Choice

Suppose an economy has only three goods and the typical family purchases the amounts given in the following table.If 2012 is the base year,then what is the CPI for 2017? $$\begin{array} { | c | c | c | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Quantity } \\\text { (2012) }\end{array} & \begin{array} { c } \text { Price } \\\text { (2012) }\end{array} & \begin{array} { c } \text { Expenditures } \\\mathbf { ( 2 0 1 2 ) }\end{array} & \begin{array} { c } \text { Price } \\\text { (2017) }\end{array} & \begin{array} { c } \text { Expenditures (on base } \\\text { year quantities) (2017) }\end{array} \\\hline \text { Hair cuts } & 6 & \$ 50 & \$ 300 & \$ 80 & \$ 480 \\\hline \text { Backpacks } & 4 & \$ 25 & \$ 100 & \$ 30 & \$ 120 \\\hline \text { Tacos } & 100 & \$ 1.00 & \$ 100 & \$ 5.00 & \$ 500 \\\hline \text { Total } & & & \$ 500 & & \$ 1100 \\\hline\end{array}$$

• A) 220
• B) 208
• C) 40.08
• D) 100

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