Answer :
Final answer:
The price index for 2022, using the 2021 gas price of $2.24 as the reference value, is 105.36.
Explanation:
The price index for 2022 is calculated by taking the ratio of the current year's price (2022) to the base year's price (2021), and then multiplying by 100. In this case, the 2022 gas price is divided by the 2021 price and multiplied by 100:
Price Index = (Gas Price in 2022 / Gas Price in 2021) * 100
Price Index = ($2.40 / $2.24) * 100
Price Index = 105.36
This means that the gas prices in Roanoke in 2022 were 5.36% higher than they were in 2021, using 2021 as the reference year.
Price indices are essential tools for measuring inflation and price changes over time. They help us understand how the cost of goods and services has evolved in comparison to a chosen base year. In this case, the price index of 105.36 indicates that, on average, gas prices increased by 5.36% in Roanoke from 2021 to 2022.
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