Suppose the market basket consists of 400x, 150y, and 220z. current-year prices are $1.50 for each unit of x, $0.50 for each unit of y, and $4.60 for each unit of z. base-year prices are $1.00 for each unit of x, y, and z. approximately what is the value of the cpi in the current year?

219.09

Explanation:

Product Quantity ( Weight )  Base-year price Current-year price

   X          400                                   1.00                    1.50

   Y                  150                                   1.00                   0.50

   Z            220                                   1.00                   4.60

CPI =  Cost of market basket in Current Period  x   100

          Cost of market basket in Base Period  

CPI =  400 * 1.50   +  150 * 0.50  +  220 * 4.60  x   100

         400 * 1.00   +  150 * 1.00  +  220 * 1.00  

CPI =  1,687.00 x   100

         770.00  

CPI =    2.19  x   100

CPI =  219.09  

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