Consider an imaginary price index, the Undergraduate Price Index (UPI), created to represent the annual purchases made by a typical undergradute. The following table contains information on the market basket for the UPI and the price of each good in 2020, 2021, and 2022. The cost of each good in the basket as well as the basket's total cost are given for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index 2020 Price Quantity in Basket (Dollars) 1 64 150 2 10 80 8 2 40 3 Suppose this price index uses 2020 as the base year. Cost Cost Price (Dollars) (Dollars) (Dollars) 64 104 300 2 800 85 16 120 1,300 100 2021 2 In the last row of the table, calculate and enter the value of the UPI for the remaining years. 2022 Price Cost (Dollars) (Dollars) 134 2 105 4 5 0000000 Between 2020 and 2021, the UPI increased by [ %. Between 2021 and 2022, the UPI increased by [ Which of the following, if true, would illustrate why price indexes such as the UPI might overstate inflation in the cost of going to college? Check all that apply. The quality of content provided by streaming services improved dramatically from 2020 to 2022. Many companies invested heavily in the actors cast for their original series, but this quality change is hard to measure. A natural dietary supplement is developed that is clinically proven to safely boost memory. As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all,
Consider an imaginary price index, the Undergraduate Price Index (UPI), created to represent the annual purchases made by a typical undergradute. The following table contains information on the market basket for the UPI and the price of each good in 2020, 2021, and 2022. The cost of each good in the basket as well as the basket's total cost are given for 2020. Perform these same calculations for 2021 and 2022, and enter the results in the following table. Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index 2020 Price Quantity in Basket (Dollars) 1 64 150 2 10 80 8 2 40 3 Suppose this price index uses 2020 as the base year. Cost Cost Price (Dollars) (Dollars) (Dollars) 64 104 300 2 800 85 16 120 1,300 100 2021 2 In the last row of the table, calculate and enter the value of the UPI for the remaining years. 2022 Price Cost (Dollars) (Dollars) 134 2 105 4 5 0000000 Between 2020 and 2021, the UPI increased by [ %. Between 2021 and 2022, the UPI increased by [ Which of the following, if true, would illustrate why price indexes such as the UPI might overstate inflation in the cost of going to college? Check all that apply. The quality of content provided by streaming services improved dramatically from 2020 to 2022. Many companies invested heavily in the actors cast for their original series, but this quality change is hard to measure. A natural dietary supplement is developed that is clinically proven to safely boost memory. As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all,
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider an imaginary price index, the Undergraduate Price Index (UPI), created to represent the annual purchases made by a typical undergradute.
The following table contains information on the market basket for the UPI and the price of each good in 2020, 2021, and 2022.
The cost of each good in the basket as well as the basket's total cost are given for 2020.
Perform these same calculations for 2021 and 2022, and enter the results in the following table.
2020
Streaming services
Iced coffees
Textbooks
Notebooks
Energy drinks
Total cost
Price index
Price
Quantity in Basket (Dollars)
1
64
150
2
10
8
40
Suppose this price index uses 2020 as the base year.
80
2
3
Cost
(Dollars)
64
300
800
16
120
1,300
100
Price
(Dollars)
104
2
85
2
4
2021
Cost
(Dollars)
In the last row of the table, calculate and enter the value of the UPI for the remaining years.
2022
%. Between 2021 and 2022, the UPI increased by
Price
Cost
(Dollars) (Dollars)
134
2
105
4
5
Between 2020 and 2021, the UPI increased by [
Which of the following, if true, would illustrate why price indexes such as the UPI might overstate inflation in the cost of going to college? Check all
that apply.
The quality of content provided by streaming services improved dramatically from 2020 to 2022. Many companies invested heavily in the
actors cast for their original series, but this quality change is hard to measure.
A natural dietary supplement is developed that is clinically proven to safely boost memory.
As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all,
instead using the copies on reserve in the library.
Professors required each student to buy 10 textbooks, regardless of the price.
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