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6. Suppose that the residents of Virgin Island spend all of their income on long beans, bean sprouts, and carrots. In 2006, they buy 100

6. Suppose that the residents of Virgin Island spend all of their income on long beans, bean sprouts, and carrots. In 2006, they buy 100 strands of long beans for RM200, 50 kilos of bean sprouts for RM75, and 500 carrots for RM50. In 2007, they buy 75 strands of long beans for RM225, 80 kilos of bean sprouts for RM120, and 500 carrots for RM100.

a) Calculate the price of each vegetable in each year.

b) Using 2006 as the base year, calculate the CPI for each year.

c) What is the inflation rate in 2007?

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