Say that the bundle of goods purchased by a typical


Question: Say that the bundle of goods purchased by a typical consumer in the base year consisted of 20 gallons of milk at a price of $1 per gallon and 15 loaves of bread at a price of $2 per loaf. What would the price index be in a year in which

a. milk cost $2 per gallon and bread cost $1 per loaf?

b. milk cost $3 per gallon and bread cost $2 per loaf?

c. milk cost $2 per gallon and bread cost $4 per loaf?

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Microeconomics: Say that the bundle of goods purchased by a typical
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