Question

se the following table to answer the next question. The base year is 2007.

Year	Hot Dogs Price           Quantity	Baseballs Price           Quantity	Bottles of Beer Price          Quantity
2005	$ 2.50             100	$ 2.50                  50	$1.00               100
2006	4.00             100	5.00                100	2.00               150
2007	5.00             100	5.00                100	2.00               200
2008	8.00             150	8.00                200	4.00               200
2009	10.00             200	10.00                200	4.00               250

The Consumer Price Index for the year 2005 is

Answer 1

Answer
Cost of a basket in base year =sum of (the price of the base year * quantity of base year)
Cost of the basket in base year=5*100+5*100+2*200
=1400
Cost of a basket in current year =sum of (the price of the current year* quantity of base year)
Cost of basket in 2005=2.5*100+2.5*100+1*200
=700
CPI =(Cost of the basket in the year/cost of the basket in the base year)*100
=(700/1400)*100
=50

the CPI in the year 2005 is 50