Question

The residents of Vegopia spend all of their income on cauliflower, broccoli, and carrots. In 2016, they spend a total of $250 for 100 heads of cauliflower, $100 for 50 bunches of broccoli, and $250 for 500 carrots. In 2017, they spend a total of $210 for 60 heads of cauliflower, $180 for 90 bunches of broccoli, and $270 for 450 carrots. Complete the following table by calculating the price of one unit of each vegetable in each year. Year Cauliflower Broccoli Carrots 2016 $ $ $ 2017 $ $ $ Using 2016 as the base year, the CPI for 2016 is , and the CPI for 2017 is . The inflation rate in 2017 is % using the CPI.

Answer 1

Answer:

10%

Explanation:

Price of One Unit of Good= Total Spending ÷ Total Quantity

In 2016,

They spend a total of $250 for 100 heads of cauliflower

Price of One Unit of Cauliflower=250÷100=$2.50 per unit

$100 for 50 bunches of broccoli,

Price of One Unit of Brocolli =100÷50=$2 per unit

$250 for 500 carrots

Price of One Unit of carrot =250÷500=$0.50 per unit

In 2017,

They spend a total of $210 for 60 heads of cauliflower

Price of One Unit of Cauliflower=210÷60=$3.50 per unit

$180 for 90 bunches of broccoli,

Price of One Unit of Brocolli =180÷90=$2 per unit

$270 for 450 carrots

Price of One Unit of carrot =270÷450=$0.60 per unit

$\left\begin{array}{cccc}Year & Cauliflower & Broccoli & Carrot \\ 2016 & 2.50 & 2.00 & 0.50 \\ 2017 & 3.50 &2.00 & 0.60 \end{array} \right$

Using 2016 as the base year, the CPI for 2016 is 100,

Therefore the CPI for 2017:

$\frac{210 + 180 + 270}{250 + 100 + 250} X 100 = \frac{660}{600} X 100 =110$

Therefore the inflation rate in 2017 using the CPI is:

Inflation rate = $\frac{110-100}{100} X 100$ = 10%.