Table 24-12. Will’s expenditures on food for three consecutive years, along with other values, are presented in the table below.

Table 24-12. Will’s expenditures on food for three consecutive years, along with other values, are presented in the table below.

Year 2009 2010 2011

Expenditures on Food $5,000 $5,800 $6,600

Consumer Price Index 160.0 168.0 x

33. Refer to Table 24-12.

Will’s 2009 food expenditures in 2010 dollars amount to ?

a. $5,500.

b. $5,250.

c. $4,975.

d. $3,625.

 

 

answer:

Solution: $5,250

Working:

Consumer Price Index = Current Period Price of the Basket / Base Period Price of the Basket × 100

= 168/160 * 5000 = 5250

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