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Question - Calculate a price index for 2011, 2012, and 2013 using the following information about prices. Let the market basket consist of one pizza, two sodas, and three video rentals. Let the year 2011 be the base year (with an index value of 100).
YEAR
PRICE OF A PIZZA
PRICE OF A SODA
PRICE OF A VIDEO RENTAL
2011
$ 9.00
$ 0.50
$ 2.00
2012
$ 9.50
$ 0.53
$ 2.24
2013
$ 10.00
$ 0.65
$ 2.90
1. How much inflation occurred between 2011 and 2012?
2. How much inflation occurred between 2011 and 2013?
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