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2. Calculating inflation using a simple price index 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 2020, 2021, and 2022. The cost of each item in the basket and the total cost of the basket are shown for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. 2020 2021 2022 Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) Cost (Dollars) Price (Dollars) Cost (Dollars) Notebooks 15 2 30 5 8 Calculators 1 70 70 100 130 Large sodas 250 2 500 2 2 Energy drinks 50 2 100 4 6 Textbooks 10 120 1,200 150 180 Total cost Price index 1,900 100 Suppose the base year for this price index is 2020. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2020 and 2021, the CSPI increased by % Between 2021 and 2022, the CSPI increased by

2. Calculating inflation using a simple price index 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 2020, 2021, and 2022. The cost of each item in the basket and the total cost of the basket are shown for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. 2020 2021 2022 Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) Cost (Dollars) Price (Dollars) Cost (Dollars) Notebooks 15 2 30 5 8 Calculators 1 70 70 100 130 Large sodas 250 2 500 2 2 Energy drinks 50 2 100 4 6 Textbooks 10 120 1,200 150 180 Total cost Price index 1,900 100 Suppose the base year for this price index is 2020. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2020 and 2021, the CSPI increased by % Between 2021 and 2022, the CSPI increased by

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 13P
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2. Calculating inflation using a simple price index 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 2020, 2021, and 2022. The cost of each item in the basket and the total cost of the basket are shown for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. 2020 2021 2022 Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) Cost (Dollars) Price (Dollars) Cost (Dollars) Notebooks 15 2 30 5 8 Calculators 1 70 70 100 130 Large sodas 250 2 500 2 2 Energy drinks 50 2 100 4 6 Textbooks 10 120 1,200 150 180 Total cost Price index 1,900 100 Suppose the base year for this price index is 2020. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2020 and 2021, the CSPI increased by % Between 2021 and 2022, the CSPI increased by
Transcribed Image Text:2. Calculating inflation using a simple price index 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 2020, 2021, and 2022. The cost of each item in the basket and the total cost of the basket are shown for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. 2020 2021 2022 Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) Cost (Dollars) Price (Dollars) Cost (Dollars) Notebooks 15 2 30 5 8 Calculators 1 70 70 100 130 Large sodas 250 2 500 2 2 Energy drinks 50 2 100 4 6 Textbooks 10 120 1,200 150 180 Total cost Price index 1,900 100 Suppose the base year for this price index is 2020. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2020 and 2021, the CSPI increased by % Between 2021 and 2022, the CSPI increased by
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