Table
The following table lists the per gallon prices of gas and milk for the months of April, May, and June. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that April is the base period.

Month Price of Gas (Dollars per gallon) Price of Milk (Dollars per gallon)
April 2.00 3.50
May 3.50 3.52
June 3.85 3.58

Refer to the Table. What is the consumer price index for May?

Question

Table 
The following table lists the per gallon prices of gas and milk for the months of April, May, and June. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that April is the base period.

Month	Price of Gas (Dollars per gallon)	Price of Milk (Dollars per gallon)
April	2.00	3.50
May	3.50	3.52
June	3.85	3.58

Refer to the Table. What is the consumer price index for May?

BlackTom AI · Accepted Answer

CPI compares the cost of a fixed basket in the current month to its cost in the base period and multiplies by 100. Relevant concepts: a fixed basket (60 gallons of gas, 4 gallons of milk), base period (April), and the CPI formula: CPI_month = (Cost_of_basket_month / Cost_of_basket_base) × 100.

Step-by-step calculation:
1. Compute cost of the basket in the base period (April).
   - Gas in April: $2.00 × 60 gallons = $120.00
   - Milk in April: $3.50 × 4 gallons = $14.00
   - Total April cost = $120.00 + $14.00 = $134.00

2. Compute cost of the same basket in May.
   - Gas in May: $3.50 × 60 gallons = $210.00
   - Milk in May: $3.52 × 4 gallons = $14.08
   - Total May cost = $210.00 + $14.08 = $224.08

3. Apply the CPI formula:
   - CPI_May = (224.08 / 134.00) × 100
   - 224.08 / 134.00 = 1.672238806
   - CPI_May ≈ 1.672238806 × 100 = 167.2238806

Rounding to the nearest whole number (as answer choices are whole numbers) gives CPI ≈ 167. This is correct because it directly measures how much more expensive the fixed basket is in May relative to April: about a 67.22% increase, so an index of roughly 167.

Why other choices are incorrect:
- 132 would imply only a ~32% overall price rise; it is far too low given gas nearly doubled from $2.00 to $3.50 and dominates spending.
- 123 similarly understates the increase.
- 60 would imply prices fell to 60% of the base, which contradicts the actual rise.

Final confirmation: the consumer price index for May is 167, matching the provided answer.

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