Question

The prices of consumer goods do not always exactly follow the CPI. The following chart shows several consumer items, along with their respective prices in 1983 and today.

Item
Price in 1983 ($)
Current Price ($)
Shower curtain
8.85
15.66
Floor rug
71.25
119.75
T-shirt
13.95
23.99
Oscillating fan
22.75
37.50

Using the prices shown on this chart, which of the following is a reasonable estimate of the current CPI?
a.
164
b.
170
c.
185
d.
199


Please select the best answer from the choices provided

A
B
C
D

Answer 1

B

Assume 1983 = CPI 100. For each item compute (current / 1983) × 100:
- Shower curtain: 15.66/8.85 ≈ 1.77 → 177
- Floor rug: 119.75/71.25 ≈ 1.68 → 168
- T-shirt: 23.99/13.95 ≈ 1.72 → 172
- Oscillating fan: 37.50/22.75 ≈ 1.65 → 165

Average ≈ (177 + 168 + 172 + 165)/4 = 170.5 → about 170 (choice B).