00:02
Hello, let me start answering this question with calculation of market baskets.
00:10
So first let me calculate the cost of the market basket for 1975, so in 75 year prices.
00:29
So here we have 29.
00:33
29 dozens of x times the price in 1975 which is 1 .1 plus 19 calculators and the price is $15 plus 9 microwave ovens multiplied by the price.
01:08
And 80 and if you calculate this i'm sorry this one is 19 so the cost of the market basket in 1975 is 1 ,000 and 936 and 90 cents and we can calculate the similar market basket for 1976.
01:53
Using the same formula we just now use prices in nineteen seventy six now the price of one dozen of x is 1 .7.
02:12
Calculators they have the price of 17 dollars and finally we multiply 9 microwave ovens by their price which is $230 and the answer is $2 ,400 ,000 and that's for is $2 ,400 ,000 and now we can calculate the consumer price index for both years.
02:58
So the first one is very simple.
03:05
So cpi for 75 is equal to market basket of this year divided by the market basket of the base year but the base year here is the same 70, 1975.
03:32
So we divide this number by the same number.
03:43
So if we divide this, we have one and multiplying by 100, because as we know this index is presented as the percentage...