Pete is a student who spends 10 percent of his expenditure on books and supplies, 30 percent

Question:

Pete is a student who spends 10 percent of his expenditure on books and supplies, 30 percent on tuition, 30 percent on rent, 10 percent on food and drink, 10 percent on transportation, and the rest on clothing. The price index for each item was 100 in 2006. The table shows the prices in 2016. What is Pete€™s CPI in 2016? (Hint: The contribution of each item to the CPI is its price weighted by its share of total expenditure.) Did Pete experience a higher or lower inflation rate between 2006 and 2016 than the student whose CPI is shown on p. 607?

Item Price in Books and supplies 172.6 169.0 Tuition Rent 159.0 Food and drink 129.8 Transportation Clothing 115.4 92.9