Question: a cpi basket is composed of 10 widgets and 6...
A CPI basket is composed of 10 widgets and 6 gadgets. If, in the base year, the price of a widget is $3 and the price of the gadget was $7, and in the current year the price of widget is $6 and the price of a gadget is $5:
a) what is the CPI for the current year?
b) According to this CPI, what income in the current year would have equivalent purchasing power to $24 in the base year?