Answer:
The correct answer is option B.
Explanation:
In the base period a college student buys 20 gallons of gasoline at $2 per gallon, 2 CDs for $13 each, and 4 movie tickets for $7 each.
In the next month, the price of gasoline is $2.25 per gallon, CDs cost $12.50 each, and the price of a movie ticket is $7.50.
The price index
= [tex]\frac{price\ of\ basket\ in\ the\ current\ year}{price\ of\ basket\ in\ the\ base\ year}\ \times\ 100[/tex]
= [tex]\frac{100}{94}\ \times\ 100[/tex]
= 106.38 or 106.4
