all Verizon 2:08 PM a courses.aplia.com 44% 496 + ep the Highest Consider a fict
ID: 1141117 • Letter: A
Question
all Verizon 2:08 PM a courses.aplia.com 44% 496 + ep the Highest 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 2014, 2015, and 2016. The cost of each item in the basket and the total cost of the basket are shown for 2014. Perform these same calculations for 2015 and 2016, and enter the results in the following 20 90 220 11 Tatal cest Price indes Suppose the base year for this price index is 2014 In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2014 and 2015, the CSPI increased by. Between 2015 and 2016, the CSP 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 Professors required each student to buy 10 notebooks, regardless of the price. As the price of energy drinks increased relative to the price of coffee between 2014 and 2016, students decreased their consumption of energy drinks and increased their consumption of coffee. A new type of personal transporter, which made it easier to get around places like university campuses, became available for purchase. The quality of textbooks increased dramatically from 2014 to 2016, with textbook companies bundling new online study aids with their books, but this quality change is hard to measure.Explanation / Answer
Ans:
Price Index = cost of market basket in a given year / cost of market basket in a base year * 100
1) Table showing total cost of the basket for 2015 and 2016.
2)
Increase in CSPI between 2014 and 2015 = (120 - 100) / 100
= 20 / 100
= 0.2 or 20%
Increase in CSPI between 2015 and 2016 = (132-120) /120
= 12 / 120
= 0.1 or 10%
3) Following will apply
Professors required each student to buy 10 notebooks, regardless of the price.
The quality of textbooks increased dramatically from 2014 to 2016, with textbook companies bundling new online study aids with their books, but this quality change is hard to measure.
Particulars Quantity Prices in 2015 cost in 2015 Prices in 2016 Cost in 2016 Notebooks 10 3 $30 4 $40 Calculators 1 80 $80 104 $104 Large coffees 300 2 $600 2 $600 Energy drinks 75 4 $300 5 $375 Text books 8 110 $880 120 $960 Total cost $1890 $2079 Index 120 132Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.