Mr. Bunker lives on beer and pretzels. In 2000, he bought 1,000 six-packs of beer for $2.00 per six-pack and 500 bags of pretzels for $1.00 per bag. In 2010, Bunker’s beer cost $3.00 per six-pack and his pretzels cost $2.00 per bag. One way to calculate Bunker’s rate of inflation is

where C₂₀₁₀ = cost of 1,000 six-packs and 500 bags of pretzels in 2010 and C₂₀₀₀ = cost of 1,000 six-packs and 500 bags of pretzels in 2000. What was the percentage increase in Bunker’s cost of living between 2000 and 2010? If we calculate a Bunker Price Index (BPI) and scale this BPI to equal 100 in 2000, what is the 2010 value of the BPI?

Transcribed Image Text:

100 C2010-C2000 C2000