BUSC1A chapter 6 (12) Perform these same calculations for 2011 and 2012, and ent

Question

BUSC1A chapter 6 (12)

Perform these same calculations for 2011 and 2012, and enter the results in the following table 2010 2011 2012 Price Expenditure Price Expenditure Price Expenditure Quantity in Market Basket (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index 15 30 70 500 100 1,200 1,900 100 70 100 130 250 50 10 2 120 150 180 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

Explanation / Answer

(1) Expenditure for good i, year N = Quantity of good i in market basket x Price of good i, year N

Price index, year N = (Total expenditure in year N / Total expenditure in year 2010) x 100

(2)

Between 2010 and 2011, CSPI increased by 25% [= (125 /100) - 1 = 1.25 - 1 = 0.25 = 25%]

Between 2011 and 2012, CSPI increased by 20% [= (150 /125) - 1 = 1.2 - 1 = 0.2 = 20%]

(3) % Increase in price = % Change in CPI

Year 2007: (207.3 / 201.6) - 1 = 1.028 - 1 = 0.028 = 2.8%

Year 2008: (215.3 / 207.3) - 1 = 1.039 - 1 = 0.039 = 3.9%

2010 ($) 2011 ($) 2011 ($) Quantity Price EXP Price EXP Price EXP Notebook 15 2 30 5 75 8 120 Calculator 1 70 70 100 100 130 130 Large coffee 250 2 500 2 500 2 500 Energy drink 50 2 100 4 200 6 300 Textbook 10 120 1200 150 1500 180 1800 TOTAL COST 1900 2375 2850 Price Index 100 125 150

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.