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(Solved): Consider a fictional price index, the College Student Price Index (CPI), based on a typical college ...
Consider a fictional price index, the College Student Price Index (CPI), based on a typical college student's annual purchases. Suppose the following
table shows information on the market basket for the CPI and the prices of each of the goods in 2010, 2011, and 2012,
The cost of each item in the basket and the total cost of the basket are shown for 2010.
Perform these same calculations for 2011 and 2012, and enter the results in the following table.
Suppose the base year for this price index is 2010.
In the last row of the table, calculate and enter the value of the CSPI for the remaining years.
Between 2010 and 2011, the CSPI increased by
%
- Between 2011 and 2012, the CSPI increased by
Which of the following, if true, would illustrate why price indexes such as the CPI might overstate inflation in the cost of going to college? Check all
that apply.
U A new type of personal transporter, which made it easier to get around places like university campuses, became available for purchase.
Professors required each student to buy eight textbooks, regardless of the price.
U The quality of textbooks increased dramatically from 2010 to 2012, with textbook companies bundling new online study aids with their
books.
As the price of energy drinks increased relative to the price of coffee between 2010 and 2012, students decreased their consumption of
energy drinks and increased their consumption of coffee.
Attempts 8. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2010, 2011, and 2012. The cost of each item in the basket and the total cost of the basket are shown for 2010. Perform these same calculations for 2011 and 2012, and enter the results in the following table. Notebooks Calculators Keep the Highest/3 Large coffees Energy drinks Textbooks Total cost Price index Quantity in Basket 10 1 300 75 8 Price Cost (Dollars) (Dollars) 3 30 75 600 150 720 75 2 2 90 Suppose the base year for this price index is 2010. 2010 Between 2010 and 2011, the CSPI increased by 1.575 100 Price (Dollars) 3 80 2 4 110 2011 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Price Cost (Dollars) (Dollars) 104 2 5 120 2012 1% Between 2011 and 2012, the CSPI increased by % Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to collene? Chark Type here to search
Suppose the base year for this price index is 2010. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2010 and 2011, the CSPI increased by 96 Between 2011 and 2012, the CSPI increased by Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply. A new type of personal transporter, which made it easier to get around places like university campuses, became available for purchase. Professors required each student to buy eight textbooks, regardless of the price. The quality of textbooks increased dramatically from 2010 to 2012, with textbook companies bundling new online study aids with their books. As the price of energy drinks increased relative to the price of coffee between 2010 and 2012, students decreased their consumption of energy drinks and increased their consumption of coffee.