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. Quantity in Basket 2020 Price (Dollars) Cost (Dollars) 2021 Price Cost (Dollars) (Dollars) Price (Dollars) 2022 Cost (Dollars)
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. Quantity in Basket 2020 Price (Dollars) Cost (Dollars) 2021 Price Cost (Dollars) (Dollars) Price (Dollars) 2022 Cost (Dollars)
Chapter6: Tracking The U.s. Economy
Section: Chapter Questions
Problem 4.8P
Related questions
Question
100%
Please answer all parts
![6. Calculating inflation using a simple price index
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
Quantity in Basket
1
150
10
8
40
Suppose this price index uses 2020 as the base year.
Price
(Dollars)
64
2
Between 2020 and 2021, the UPI increased by
80
2
2020
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.
% Between 2021 and 2022, the UPI increased by
Price
(Dollars)
134
2
105
4
5
96
2022
Cost
(Dollars)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52bd3cfe-3c9b-40ce-8732-3b0b81ba9280%2Fc1fdcafc-581d-476f-b67c-e63c2b02e0c9%2F2v0v1rm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:6. Calculating inflation using a simple price index
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
Quantity in Basket
1
150
10
8
40
Suppose this price index uses 2020 as the base year.
Price
(Dollars)
64
2
Between 2020 and 2021, the UPI increased by
80
2
2020
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.
% Between 2021 and 2022, the UPI increased by
Price
(Dollars)
134
2
105
4
5
96
2022
Cost
(Dollars)
![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
Quantity in Basket
1
150
10
8
40
Suppose this price index uses 2020 as the base year.
Price
Cost
Price
(Dollars) (Dollars) (Dollars)
64
64
104
2
Between 2020 and 2021, the UPI increased by
80
2020
2
3
300
800
16
120
1,300
100
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.
Between 2021 and 2022, the UPI increased by
Price
(Dollars)
134
2
105
4
5
%
2022
Cost
(Dollars)
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.
O Professors required each student to buy eight notebooks, regardless of the price.
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.
A natural dietary supplement is developed that is clinically proven to safely boost memory.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52bd3cfe-3c9b-40ce-8732-3b0b81ba9280%2Fc1fdcafc-581d-476f-b67c-e63c2b02e0c9%2Fujt624d_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
Quantity in Basket
1
150
10
8
40
Suppose this price index uses 2020 as the base year.
Price
Cost
Price
(Dollars) (Dollars) (Dollars)
64
64
104
2
Between 2020 and 2021, the UPI increased by
80
2020
2
3
300
800
16
120
1,300
100
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.
Between 2021 and 2022, the UPI increased by
Price
(Dollars)
134
2
105
4
5
%
2022
Cost
(Dollars)
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.
O Professors required each student to buy eight notebooks, regardless of the price.
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.
A natural dietary supplement is developed that is clinically proven to safely boost memory.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 7 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Macroeconomics: Principles and Policy (MindTap Co…](https://www.bartleby.com/isbn_cover_images/9781305280601/9781305280601_smallCoverImage.gif)
Macroeconomics: Principles and Policy (MindTap Co…
Economics
ISBN:
9781305280601
Author:
William J. Baumol, Alan S. Blinder
Publisher:
Cengage Learning
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Macroeconomics: Principles and Policy (MindTap Co…](https://www.bartleby.com/isbn_cover_images/9781305280601/9781305280601_smallCoverImage.gif)
Macroeconomics: Principles and Policy (MindTap Co…
Economics
ISBN:
9781305280601
Author:
William J. Baumol, Alan S. Blinder
Publisher:
Cengage Learning
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Brief Principles of Macroeconomics (MindTap Cours…](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning