Question

   Ch 11        

7. Problems and Applications Q2 The residents of Vegopia spend all of their income on cauliflower, broccoli, and carrots. In 2013, they spend a total of $200 for 100 heads of cauliflower, $75 for 50 bunches of broccoli, and $50 for 500 carrots. In 2014, they spend a total of $225 for 75 heads of cauliflower, $120 for 80 bunches of broccoli, and $100 for 500 carrots. Complete the following table by calculating the price of one unit of each vegetable in each year. Year Cauliflower Broccoli Carrots 2013 2014 Using 2013 as the base year, the CPI for 2013 is_________ , and the CPI for 2014 is________ . The inflation rate in 2014 is _____ using the CPI.

Answer 1

Cost of basket in current period x100 CPI in 2013 Cost of basket in base year 325 325 一_×100 100 Cost of basket in current period CPI in 2014- x100 Cost of basket in base year 475 325 = 1146 ×100 CP1 2014-CP1203 2013 x100 Inflation rate in 2014 CP1 2013 146-100 = ×100 100 46%)