Question

Suppose the current cost of gasoline is ​$2.93 per gallon. Find the current price index​ number, using the 1975 price of 56.7 cents as the reference value.

Answer 1

Explanation:

To find the current price index number using the 1975 price of 56.7 cents as the reference value, we can use the formula:

Price Index = (Current Price / Base Price) x 100

Where "Current Price" is the current cost of gasoline, and "Base Price" is the 1975 price of 56.7 cents.

Substituting the values given in the problem, we get:

Price Index = ($2.93 / $0.567) x 100

Price Index = 516.899

Therefore, the current price index number, using the 1975 price of 56.7 cents as the reference value, is 516.899.