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Hanna, who is a 5-year-old girl, eats nothing but pasta, yogurt, and lemonade
Hanna, who is a 5-year-old girl, eats nothing but pasta, yogurt, and lemonade. Each month her parents buy 32 pounds of pasta, 79 packages of yogurt, and 22 bottles of lemonade. These three items make up a basket of goods and services similar to the much larger basket used by the Bureau of Labor Statistics (BLS) when computing the official Consumer Price Index (CPI). The table below lists the average price for each item in this basket for the past four years.
Hanna's Meals
YearPasta (dollars per pound)Yogurt (dollars per package)Lemonade (dollars per bottle)
1 $1.83 $1.14 $2.58
2 1.90 1.04 2.35
3 2.07 0.95 2.54
4 2.26 1.04 2.77
Instructions: Round your answers to two decimal places.
a. For each year, calculate the CPI, using year 1 as the base year.
In year 1, the CPI was __
In year 2, the CPI was ___
In year 3, the CPI was _____
In year 4, the CPI was ____
b. For each year, calculate the CPI, using year 3 as the base year.
In year 1, the CPI was ___
In year 2, the CPI was ___
In year 3, the CPI was _____
In year 4, the CPI was _____
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