Summary Exercises of Consumer Price Index

Economics of tourism
Class activity on the Consumer Price Index
Escola Universitària de Turisme i Direcció Hotelera


1. The table below describes the consumption basket of a typical consumer (that eats, drinks and dress)
and the prices for each good for 4 years.


Units a Units a Units a
In Euros In Euros In Euros
month month month
Year Lunch Price Drinks Price Dresses Price
2016 30 9 45 4 3 35
2017 30 9.5 45 4.5 3 36
2018 30 10 45 4.70 3 37
2019 30 10.5 45 4.80 3 38


a. The table above resumes the two first steps out of the five necessaries to calculate the CPI,
comment briefly what are these steps.
The steps to compute the CPI are fixing the basket (consists of knowing which prices are most important for
a typical consumer to give more weigh to the ones most important); finding the prices (of each product at
different moments); computing the basket cost for each year; taking a base year and compute the CPI and
the inflation rate.


b. Compute the basket cost for each year.


Year Cost of Lunch Cost of Drinks Cost of Dresses TOTAL
2016 30*9=270 45*4= 180 3*35= 105 555€ (la suma)
2017 30*9.5=285 45*4.5= 202.5 3*36= 108 595.5€
2018 30*10= 300 45*4.70=211.5 3*37= 111 622.5€
2019 30*10.5= 315 45*4.80=216 3*38= 114 645€


𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑏𝑎𝑠𝑘𝑒𝑡 𝑜𝑓 𝑔&𝑠 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑦𝑒𝑎𝑟
c. Taking 2016 as the base year, compute the CPI = 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑏𝑎𝑠𝑘𝑒𝑡 𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟
* 100



Year € basket current year € basket base year TOTAL
2016 555 555 (555/555)*100 = 100
2017 595.5 555 (595.5/555)*100 = 107.30
2018 622.5 555 (622.5/555)*100= 112.16