The table shows the base year and current year prices for a consumer price index. Item Base year price ($) Current year price ($) Bread 2.00 2.50 Milk 1.50 ...
Question 1 Report
The table shows the base year and current year prices for a consumer price index.
| Item | Base year price ($) | Current year price ($) |
|---|---|---|
| Bread | 2.00 | 2.50 |
| Milk | 1.50 | 1.80 |
| Rice | 3.00 | 3.30 |
Answer Details
The correct answer is Bread.
To find the largest percentage price increase, calculate the percentage change for each item:
- Bread: \(\frac{2.50 - 2.00}{2.00} \times 100 = 25\%\)
- Milk: \(\frac{1.80 - 1.50}{1.50} \times 100 = 20\%\)
- Rice: \(\frac{3.30 - 3.00}{3.00} \times 100 = 10\%\)
Bread has the largest percentage price increase at 25%, compared to 20% for Milk and 10% for Rice.
Note that the absolute price increase for Bread ($0.50) is larger than Milk ($0.30) and Rice ($0.30), but the percentage increase is the relevant measure because it accounts for the different starting prices. The items clearly did not increase by the same percentage.
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