Answer
a)
2013:
2 dollars per cauliflower head
1.5 dollars per broccoli bunch
.10 dollars per carrot
2014:
3 dollars per cauliflower head
1.5 dollars per broccoli bunch
.20 dollars per carrot
b)
2013 CPI: 100
2014 CPI: 146
c) 46%
Work Step by Step
a)
2013:
200 dollars for 100 cauliflower heads
75 dollars for 50 broccoli bunches
50 dollars for 500 carrots
$200/100=2$ dollars per cauliflower head
$75/50=1.5$ dollars per broccoli bunch
$50/500=.10$ dollars per carrot
2014:
225 dollars for 75 cauliflower heads
120 dollars for 80 broccoli bunches
100 dollars for 500 carrots
$225/75=3$ dollars per cauliflower head
$120/80=1.5$ dollars per broccoli bunch
$100/500=.20$ dollars per carrot
b)
2013 CPI:
We know how much the 2013 basket of goods costs. ($200+75+50=325$)
basket of goods/2013 basket *100 = CPI
$325/325*100$
$1*100$
$100$ is 2013 CPI
We need to know how much a 2014 basket of goods (using 2013 consumption) would cost.
$100*3+50*1.5+500*.2$
$300+75+100$
$475$
2014 CPI = $475/325*100$
$1.4615*100$
$146.15$ = 2014 CPI
c)
Inflation rate = (2014 CPI - 2013 CPI)/2013 CPI
$i = (146-100)/100*100$
$i = 46/100*100$
$i = 46$%
