Test Index

JAMB Economics 2012 Paper

Question : 24

Total: 49

Solution:

Concept:

The price index compares the current year cost to the base year cost using the formula:

\text{Price index} = \frac{\text{Current year cost}}{\text{Base year cost}} \times 100

Explanation:

Base year cost is

N120

Current year cost is

N240

Substitute into the formula:

\text{Price index} = \frac{240}{120} \times 100

\text{Price index} = 2 \times 100 = 200

This means prices have doubled compared to the base year.

Answer:

B. 200

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