?womao-Cengage Learning ?GChegg Study i aided Solutox ? Link to Publisher Materi
ID: 1160405 • Letter: #
Question
?womao-Cengage Learning ?GChegg Study i aided Solutox ? Link to Publisher Materials-.. ic/nb/ulevo/index htmi?deploymentid 55725919015819705534195425&eIS8N; 978130565 C Secure https:/ing.cengage.com/stati MINDTAP Aplia Homework: Tracking the U.S. Economy Back to Assignme Average: 13 8. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSP), based on a typical college student's annual purchases. Suppose the table shows information on the market basket for the CSPI and the prices of each of the goods in 2010, 2011, and 2012 folowing 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 2010 Cost Quantity in Basket (Dollars) (Dolars) (DoWars) (Dollars) (Dolars) (Dolars) S0 140 100 Large coffees Energy drinks 100 1,000 1,400 100 120 150 Total cost Suppose the base year for this price index is 2010. the last row of the table, calculate and enter the value of the CSPI for the remaining years. 4 6Explanation / Answer
ANSWER:
1) 2011
2) 2012
Cost = quantity * price
price index = (total cost of current year / total cost of base year ) * 100
base year is 2010.
3) between 2010 and 2011 , the cspi increased by = (price index in 2011 - price index in 2010) / price index in 2010
= (120 - 100 ) / 100 = 20 / 100 = 0.2 or 20%
4) between 2011 and 2012 , the cspi increased by = (price index in 2012 - price index in 2011) / price index in 2011
= (150 - 120 ) / 120 = 30 / 120 = 0.25 or 25%
5) a , b and d are right as a shows the index inflation while b shows that memory ebhancer would lead to increase in purchase as students are always interested in buying product which helps them in studies while d is right because of the increase in quality while c is wrong because it doesn't account for quantity.
2011 QUANTITY PRICE COST NOTEBOOKS 10 7 70 CALACULATORS 1 110 110 LARGE COFFEES 150 1 150 ENERGY DRINKS 50 3 150 TEXTBOOKS 10 120 1200 TOTAL COST 1680 PRICE INDEX 120Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.