Consider a fictional price index, the Canadian Student Price Index (CSPI), based on a typical university 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 2017, 2018, and 2019. The cost of each item in the basket and the total cost of the basket are shown for 2017. Perform these same calculations for 2018 and 2019, and enter the results in the following table. 2017 2018 Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Price Quantity in Basket (Dollars) 10 2 1 200 100 10 50 1 2 100 Suppose the base year for this price index is 2017. Cost (Dollars) 20 50 200 200 1,000 1,470 100 Price (Dollars) 1 54 1 3 120 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. 2019 Price Cost (Dollars) (Dollars) 3 75 1 4 150 Between 2017 and 2018, the CSPI 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 university? Check all that apply. %. Between 2018 and 2019, the CSPI increased by 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 2017 and 2019, 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 2017 to 2019, with textbook companies bundling new online study aids with their books.
Consider a fictional price index, the Canadian Student Price Index (CSPI), based on a typical university 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 2017, 2018, and 2019. The cost of each item in the basket and the total cost of the basket are shown for 2017. Perform these same calculations for 2018 and 2019, and enter the results in the following table. 2017 2018 Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Price Quantity in Basket (Dollars) 10 2 1 200 100 10 50 1 2 100 Suppose the base year for this price index is 2017. Cost (Dollars) 20 50 200 200 1,000 1,470 100 Price (Dollars) 1 54 1 3 120 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. 2019 Price Cost (Dollars) (Dollars) 3 75 1 4 150 Between 2017 and 2018, the CSPI 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 university? Check all that apply. %. Between 2018 and 2019, the CSPI increased by 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 2017 and 2019, 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 2017 to 2019, with textbook companies bundling new online study aids with their books.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider a fictional price index, the Canadian Student Price Index (CSPI), based on a typical university 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 2017, 2018, and 2019.
The cost of each item in the basket and the total cost of the basket are shown for 2017.
Perform these same calculations for 2018 and 2019, and enter the results in the following table.
2017
Notebooks
Calculators
Large coffees
Energy drinks
Textbooks
Total cost
Price index
Quantity in Basket
10
1
200
100
10
Price
(Dollars)
2
50
1
2
100
Suppose the base year for this price index is 2017.
Cost
(Dollars)
20
50
200
200
1,000
Between 2017 and 2018, the CSPI increased by
1,470
100
Price
(Dollars)
1
54
1
3
120
2018
Cost
(Dollars)
In the last row of the table, calculate and enter the value of the CSPI for the remaining years.
Price
(Dollars)
3
75
1
4
150
%. Between 2018 and 2019, the CSPI increased by
2019
Professors required each student to buy 10 notebooks, regardless of the price.
Cost
(Dollars)
%
Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to university? Check
all that apply.
As the price of energy drinks increased relative to the price of coffee between 2017 and 2019, 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 2017 to 2019, with textbook companies bundling new online study aids with their
books.
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