17. Many factors influence the retail price of computers. The table below shows

Question

17. Many factors influence the retail price of computers. The table below shows the average retail price for a computer, including both desktops and laptops, during the month of November for each of the indicated years (Wall Street Journal, December 13, 2010) ights Reserved. May not be oopied, scanned, or duplicated, in whole or in part Due to electrumic rights, scime third party content may be suppressed from the eBook andor eChaplerís) sed content does not ma enal y a ect e overa eaminexpenence. Cengago ear ng reeervew he ri t tremove a clitional crn ent a any ime 1f subsequent rights reec nctions require it Supplementary Exercises 969 Year 2007 2008 2009 2010 Average Price ($) 795 705 580 615 Use 2007 as the base year and develop a price index for the retail price of a computer over this four-year period. Use 2008 as the base year and develop a price index for the retail price of a computer over this four-year period. a. b.

Explanation / Answer

17. a.

23. a. Price Relative for Seafood:

Halibut = 2.33 / 1.91 x 100 = 121.99%

Lobster = 3.09 / 3.62 x 100 = 85.35%

Tuna= 1.97 / 1.87 x 100 = 105.35%

b. Weighted Aggregate Price Index:

Calculation of Weight of each Item:

I = P1W / P0W x 100

I = 269.0644 / 285.6969 x100 = 94.18%

Halibut price has been increased sharply from 2000 to 2009 It is increased by 22% in this Period.

While price of Lobster has been declined during the same period. It is decline by 14.64%

Price of Tuna also increased but only a little change in the Price.   

RPI with 2007 as Base Year RPI with 2008 as Base Year 2007 100 RPI of Base Year is 100 112.77 795/705 x 100 2008 88.68 705/795 x 100 100 RPI of Base Year is 100 2009 72.96 580/795 x 100 82.27 580/705 x 100 2010 77.36 615/795 x 100 87.23 615/705 x 100

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