consider a fictional price index, the college student price index (CSPI), based
ID: 1095477 • Letter: C
Question
consider a fictional price index, the college student price index (CSPI), based on a survey or annual purchases or a typical college student. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2008, 2009, and 2010. The cost of each item in the basket, and the total cost of the basket, is shown for 2008. Perform these same calculations for 2009 and 2010, and enter the results in the table. Suppose the base year for this price index is 2008. Calculate and enter the value of the CSPI in all three years in the last row of the table. Between 2008 and 2009, the CSPI increased by . Between 2009 and 2010, the CSPI increased by Which of the following, if true, would illustrate why price indexes such as the CSPJ might overstate inflation In the cost of going to college? Check all that apply. As the price of calculators rose, fewer students decided to buy them, opting instead to use the free calculators in their cell phones or on their computers. Energy drinks became increasingly popular on college campuses between 2008 and 2010 due to significant improvements in flavor. Professors required students to buy 10 textbooks each, regardless of the price.Explanation / Answer
2009, cspi increased by 25%
2010, cspi increased by 20%
As the price of calculator rises, some of the student will not buy them and will start using their mobile for calculation. As they are not buying the calculator but CSPI calculation we are including the Calculator as cost to study, it will overstate the cost of studying in college.
2008 2009 2010 QTY Price Cost Price Cost Price Cost Notebooks 15 2 30 5 75 8 120 Calculators 1 70 70 100 100 130 130 large coffees 250 2 500 2 500 2 500 energy drinks 50 2 100 4 200 6 300 textbooks 10 120 1200 150 1500 180 1800 Total Cost 1900 2375 2850 Price Index 100 125 150Related Questions
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