A fixed market basket price index is an index number for the total cost of a fixed collection of goods and services. Instead of looking at one good, you will look at a collection of goods that are consistent over time.
I live in a cabin and I only buy salt, kerosene, and I hire a professional welder. Here are my purchases in 1990 (my base period). The last column is how much I spent per good/service. The total I spent was $240. I want to find my fixed market number for the year 2000 using the same quantities from 1990. Good or Service 1990 Quantity 1990 Price1990 Cost Salt100 pounds $0.50/pound $50.00 Kerosene50 gallons1.00/gallon$50.00 Welding10 hours14.00/hour$140.00
Here is the chart for 2000 So the total I spent was $360. Good or Service 1990 Quantity 2000 Price2000 Cost Salt100 pounds$0.80/pound$80.00 Kerosene50 gallons1.00/gallon$50.00 Welder10 hours23.00/hour$230.00
Practice Problems Page 326 # 5.48 (you need to add the oranges to the 1990s total price in order to find the index number). 5.52 Take about 10 mins to answer then we will study for about 10 mins, and then we will take a short quiz on normal curves, standard scores, and index numbers.