Question

britney is a baseball fan and attends several games per season. her expenses per season are listed in the table below: year 1 year 2 5 baseball tickets $500 $560 jersey $120 $150 food $150 $160 transport $60 $70 assuming that year 1 is the base year, calculate the price index for year 1 and for year 2. group of answer choices

Answer 1

The price index for year 1, the base year, is 100. To calculate the price index for year 2, divide the total expenses for year 2 by the total expenses for year 1, and then multiply by 100. The resulting price index for year 2 is 113.25, showing a 13.25% increase from year 1 to year 2.

Step-by-step explanation:

To calculate the price index for year 1 and year 2, we first need to sum up the expenses for each year. The base year is year 1, and all price indexes are calculated relative to this base year.

First, we calculate the total expenses for each year:

• Year 1: $500 (tickets) + $120 (jersey) + $150 (food) + $60 (transport) = $830
• Year 2: $560 (tickets) + $150 (jersey) + $160 (food) + $70 (transport) = $940

Since year 1 is the base year, its price index is 100 (as it is the reference point).

To calculate the price index for year 2, we use the following formula:

Price Index for year 2 = (Total expenses in Year 2 / Total expenses in Year 1) × 100

So for year 2:

Price Index = ($940 / $830) × 100 = 113.25

Therefore, the price index for year 1 is 100, and for year 2 is 113.25, indicating that prices have increased by 13.25% from year 1 to year 2.