Consumers in an economy buy apples and oranges. In year 2015, they buy 7 apples at $0.50
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Consumers in an economy buy apples and oranges. In year 2015, they buy 7 apples at $0.50 each and 5 oranges at $0.60 each. In year 2016, due to weather conditions in 5 producing areas apples become more expensive and cost $0.60 each, while oranges become cheaper and cost $0.45 each. Consumers respond to prices and change their habits by consuming 6 apples and 6 oranges. In year 2017, prices further change to $0.62 per apple and $0.47 per orange, but consumption remains unchanged relative to 2016.
What is the CPI for 2016 and 2017 using the consumption basket of year 2015 (i.e., 2015 is the base period)
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