From 1960 to 1980, the consumer price index (CPI) increased from 29.6 to
82.4. If a pound of grapes cost $0.14 in 1960 and the price of grapes
increased at the same rate as the CPI from 1960 to 1980, by approximately
how much did the price of a pound of grapes increase from 1960 to 1980?
A. $0.82
B. $0.25
C. $0.39
D. $0.30

The Consumer price index (CPI) may be a measure of the typical change overtime within the prices paid by urban consumers for a market basket of goods and services.
The CPI is one amongst the foremost popular measures of inflation and deflation.
The CPI report uses a special survey methodology, prices sample and index weights than the producer index number (PPI), which measures change within the prices received by producers of products and services.

Given:

CPI in 1960 = 29.6

CPI in 1980 = 82.4

Price of pound of grapes in 1960 = $0.14

We have to find the increase in the price of pound of grapes from 1960 to 1980.

Now, the rate of increase in the CPI from 1960 to 1980 is given by:

⇒ Rate = (CPI in 1980) / (CPI in 1960)

⇒ Rate = 82.4/29.6

⇒ Rate = 2.78

Now, the price of pound of grapes in 1980 will be calculated as:

⇒ Price of pound of grapes in 1980 = (rate of increase in the CPI from 1960 to 1980) × (Price of pound of grapes in 1960)

⇒ Price of pound of grapes in 1980 = 2.78 × $0.14

⇒ Price of pound of grapes in 1980 = $0.389

Increase in the price of pound of grapes from 1960 to 1980 will be calculated as:

⇒ Increase in the price = (Price of pound of grapes in 1980) - (Price of pound of grapes in 1960)

⇒ Increase in the price = $0.389 - $0.14

⇒ Increase in the price = $0.249

⇒ Increase in the price ≈ $0.25

Therefore, the approximate increase in the price of pound of grapes from 1960 to 1980 is $0.25.

Hence, Option (B) is correct.

Learn more about the Consumer price index (CPI) here: https://brainly.com/question/17295650?referrer=searchResults

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