Final answer:
The value of the market basket in Year 1 is $14. The value of the market basket in Year 1 is calculated by multiplying the quantity of each good by its unit price in the base year and summing these amounts.
Step-by-step explanation:
In order to find the value of the market basket in Year 1, we need to multiply the unit price of each good by the quantity of each good. From the given information, we have 8 units of water and 10 loaves of bread. Assuming Year 1 is the base year, we can calculate the value of the market basket as follows:
Value of water in Year 1 = 8 units x $0.5 = $4
Value of bread in Year 1 = 10 units x $1 = $10
Therefore, the value of the market basket in Year 1 is $4 + $10 = $14.
The value of the market basket in Year 1 is calculated by multiplying the quantity of each good by its unit price in the base year and summing these amounts.
The question at hand involves calculating the total value of a market basket in the base year, which is Year 1. To find the value of the market basket, we must multiply the quantity of each good by its unit price in Year 1. Assuming that the unit prices and quantities are given for water and bread, we will use these values to compute the total expenditure on each of these goods, and then sum these amounts to find the total value of the market basket.
For example, if the unit price of water in Year 1 is $1 and the unit price of bread is $2, and consumers are buying 8 units of water and 10 loaves of bread, we use the following calculation methodology:
Water: 8 units × $1 per unit = $8.00
Bread: 10 units × $2 per unit = $20.00
We add the amount spent on water and bread to get the total value of the market basket in Year 1:$8.00 (water) + $20.00 (bread) = $28.00.
This result represents the total expenditure on the market basket for the base year.