Question

n 1983, a microwave oven cost $78.75. Today, a microwave oven costs $92.66. If the CPI is 177, what is the relation of the actual price of a microwave oven to the expected price, to the nearest cent?
a.
The actual price is $46.73 lower than the expected price.
b.
The actual price is $5.59 lower than the expected price.
c.
The actual price is $13.91 higher than the expected price.
d.
The actual price is $71.35 higher than the expected price.

Answer 1

Assuming CPI = 100 in 1983, expected price = 78.75 * (177/100) = 78.75 * 1.77 = $139.39.
Difference = $139.39 − $92.66 = $46.73, so the actual price is $46.73 lower than expected.

Answer: a.