The CPI increased from 29.6 to 82.4.
The rate of increase, is:
82.4/29.6 = 2.78
Now multiply this rate to the $0.14 price of grapes from 1960.
$0.14 x 2.78 = $0.39
Now to get the amount of increase subtract the new price from the original price:
$0.39 - $0.14 = $0.25 increase.
The price of a pound of grapes increases by $0.25.
Consumer Price Index is an index generated from the Bureau of Labor Statistics that measures “the prices paid by urban consumers for the representative basket of goods and services.” The Bureau of Labor Statistics does not only publish 1 CPI either.
Since the pound of grapes increased by the same rate as the consumer price index (CPI) from 1960 - 1980, we must have to find first the rate of increase.
Now it says that the CPI increased by 29.6 to 82.4. To get the rate of increase, now we simply divide 82.4/29.6 = 2.783783...
Now we just sum this same rate by the $0.14 price of grapes in 1960.
= $0.14 x 2.783783
= $0.3897
this is approximately $0.39.
But the question asks for the increase, we sum the old price from the new price:
$0.39 - $0.14 = $0.25 .
The 2 largest housing components of the Consumer Price Index (CPI) basket are rents or new dwelling purchases from the owner-occupiers, which together account by around 1-6th of the CPI basket
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