Quizzol

QUESTION:

Use the following table to answer the question. The table shows the prices and the quantities consumed in Vegetarian Country. Suppose the base year is 2020. Also, suppose that 2020 is the year the typical consumption basket was determined, so the quantities consumed in 2020 are the only quantities needed to calculate the CPI in each year.

Year	Price of Carrots	Quantity of Carrots	Price of Celery	Quantity of Celery
2020	$2.00	100	$1.00	100
2021	2.50	90	0.90	120
2022	2.75	105	1.00	130

What is the value of the basket in the base year?

ANSWER:

Step 1: Calculate the value of carrots in 2020

$\text{Value of Carrots} = 2.00 \times 100 = 200$

Step 2: Calculate the value of celery in 2020

$Value of Celery = 1.00 \times 100 = 100$

Step 3: Calculate the total value of the basket in 2020

$Total Basket Value = 200 + 100 = 300$

$\text{Total Basket Value} = 200 + 100 = 300$

Posted by Cleveland on September 9, 2024