Homework answers / question archive / 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

Economics

Share With

---

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 _____