Chapter 22, Problem 2SCQ

### Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

Chapter
Section

### Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

# Construct the price index for a “fruit basket” in each year using 2003 as the base year.

To determine

To construct: the price index for a “fruit basket” for every year taking 2003 as the base year.

Explanation

If 2003 is a base year then the index numbers has a value of 100 as a base year. With the given values in table, the price of fruit basket is $15.35. We divide each year by$15.35 and multiply by 100.

 2001 2002 2003 2004 $10.70$15.35=69.71 \$13

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