Find the CPI for 2006(2005 is the base year; and 2005 as the fixed basket of goods for each year. also 2005 CPI=100)
2006 has price of $2 for 150 quantity of socks and $3 for 100 quantity of gloves.
You have not provided enough information to calculate the CPI. You need the price and quantity of every good in the fixed basket in 2005. You have only provided price and quantity in 2006.
To calculate the CPI (Consumer Price Index) for 2006 using 2005 as the base year, you will need information about the prices of certain goods in both years.
Given that the base year is 2005 and its CPI is 100, we can use this information to compare the prices in 2005 to the prices in 2006.
In 2006, the price of socks is $2 for 150 quantity and the price of gloves is $3 for 100 quantity.
To calculate the CPI for 2006, we need to compare the prices of socks and gloves in 2006 to their prices in 2005.
First, we need to find the price change for each item.
For socks:
- The price in 2005 was not given, but since the CPI for 2005 was 100, we can assume the price of socks in 2005 was $1 (100/100 = 1).
- The price in 2006 is $2.
- The price change is $2 - $1 = $1.
For gloves:
- The price in 2005 was not given, but since the CPI for 2005 was 100, we can assume the price of gloves in 2005 was $1 (100/100 = 1).
- The price in 2006 is $3.
- The price change is $3 - $1 = $2.
Next, we need to calculate the cost of the fixed basket of goods in each year. The fixed basket of goods represents a specific quantity of goods that remain constant throughout the years, in this case, socks and gloves.
For 2005, the cost of the fixed basket of goods would be calculated as:
(Quantity of socks in 2005 * Price of socks in 2005) + (Quantity of gloves in 2005 * Price of gloves in 2005)
= (1 * $1) + (1 * $1) = $2
For 2006, the cost of the fixed basket of goods would be calculated as:
(Quantity of socks in 2006 * Price of socks in 2006) + (Quantity of gloves in 2006 * Price of gloves in 2006)
= (150 * $2) + (100 * 3) = $300 + $300 = $600
Now, we can calculate the CPI for 2006 using the formula:
CPI = (Cost of the fixed basket of goods in 2006 / Cost of the fixed basket of goods in 2005) * 100
Plugging in the values:
CPI = ($600 / $2) * 100
CPI = 300 * 100
CPI = 30000
Therefore, the CPI for 2006, using 2005 as the base year, would be 30000.