Purchase Solution

Calculation of Consumer Price Index

Not what you're looking for?

Ask Custom Question

Calculate a new consumer price index for the data in the following exhibit. Assume that current-year prices of Twinkies, fuel oil, and cable TV are $0.95/package, $1.25/gallon, and $15.00/month, respectively. Calculate the current year's cost on the market basket and the value of the current year's price index. What is the year's percentage change in the price level compared to the base year?

See attached table.

Attachments
Purchase this Solution
Solution Summary

The Solution uses the consumer price index to find the percentage change in price level for three different products.

Solution Preview

The consumer price index (CPI) is the ratio of the value of a market basket of goods in a particular (current) year divided by the market value of the same basket of goods during the base year. This ratio is multiplied by 100 to ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Consumer Price Index

    131689 Labor Statistic Calculation of the Consumer Price Index The Bureau of Labor Statistics follows five steps to calculate Consumer Price Index. What are three strengths and three weaknesses of the Consumer Price Index calculation. ?

  • US Gasoline Market Slope Coefficient, Demand Equation

    PPublicTr is the price index for public transportation, ? CPId is the consumer price index for consumer durables, ? CPIn is the consumer price index for consumer nondurables, ?

  • Regression Analysis: CPI Vs S&P 500 Index

    Econometrics 2.12 Table 2-9 gives data on the Consumer Price Index (CPI) for all items (1982-1984=100) and the Standard & Poor's (S&P) index of 500 common stock prices (base of index: 1941-1943=10).

  • CPI calculation

    Weakness of CPI: It is found that the Consumer Price Index is a poor approximation to a Cost of Living Index, because of four kinds of bias in the Consumer Price Index. The four forms of bias were: 1.

  • Consumer Price Index

    Best of luck on your assignment and thank you for using BrainMass. 3 strengths and 3 weaknesses of calculation of the consumer price index is examined.

  • Calculate the unemployment rate for 2007. Compute the CPI.

    The price level of a basket of goods in 2006 was $64. The price level of that same basket of goods in 2007 was $68. If 2006 is the base year, what was the Consumer Price Index in 2007?

  • Economics: GDP, Producer Price Index, historical graph, 18 month forecast

    This contrasts with other measures, such as the Consumer Price Index (CPI). CPIs measure price change from the purchaser's perspective.

  • Wal-Mart:

    The consumer price index is actually an index of all goods and services of a typical consumer. Wal-Mart operates a chain of discount or departmental stores that sell consumer goods.

  • Value of the Consumer Price Index

    the value of the consumer price index using an established formula.

View More Related Solutions