Between 2020 and 2021, the USPI increased by Between 2021 and 2022, the USPI increased by Which of the following, if true, would illustrate why price indexes such as the USPI might overstate or exaggerate inflation in the cost of going to university? Check all that apply. Professors required each student to buy 15 notebooks, regardless of the price. The quality of textbooks increased dramatically from 2020 to 2022, with textbook companies bundling new online study aids with their books. As the price of energy drinks increased relative to the price of coffee between 2020 and 2022, 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. A large percentage of students now buy their textbooks online, while the USPI uses data from university bookstores that increase the prices of textbooks by a larger percentage per year than online retailers.
Between 2020 and 2021, the USPI increased by Between 2021 and 2022, the USPI increased by Which of the following, if true, would illustrate why price indexes such as the USPI might overstate or exaggerate inflation in the cost of going to university? Check all that apply. Professors required each student to buy 15 notebooks, regardless of the price. The quality of textbooks increased dramatically from 2020 to 2022, with textbook companies bundling new online study aids with their books. As the price of energy drinks increased relative to the price of coffee between 2020 and 2022, 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. A large percentage of students now buy their textbooks online, while the USPI uses data from university bookstores that increase the prices of textbooks by a larger percentage per year than online retailers.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Between 2020 and 2021, the USPI increased by
Between 2021 and 2022, the USPI increased by
%
Which of the following, if true, would illustrate why price indexes such as the USPI might overstate or exaggerate inflation in the cost of going to
university? Check all that apply.
Professors required each student to buy 15 notebooks, regardless of the price.
The quality of textbooks increased dramatically from 2020 to 2022, with textbook companies bundling new online study aids with their
books.
As the price of energy drinks increased relative to the price of coffee between 2020 and 2022, 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.
A large percentage of students now buy their textbooks online, while the USPI uses data from university bookstores that increase the
prices of textbooks by a larger percentage per year than online retailers.
Transcribed Image Text:Consider a fictional price index, the University Student Price Index (USPI), based on a typical university student's annual purchases. Suppose the
following table shows information on the market basket for the USPI 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.
2021
Notebooks
Calculators
Large coffees
Energy drinks
Textbooks
Total cost
Price index
Price
Quantity in Basket (Dollars)
15
2
1
70
250
2
50
10
2
120
2020
Suppose the base year for this price index is 2020.
Cost
(Dollars)
30
70
500
100
1,200
1,900
100
Price
(Dollars)
5
100
2
4
150
Cost
(Dollars)
In the last row of the table, calculate and enter the value of the USPI for the remaining years.
2022
Cost
Price
(Dollars) (Dollars)
8
130
2
6
180
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