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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)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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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)
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.
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.
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