STATISTICS F/BUSINESS+ECONOMICS-TEXT
STATISTICS F/BUSINESS+ECONOMICS-TEXT
13th Edition
ISBN: 9781305881884
Author: Anderson
Publisher: CENGAGE L
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Book Icon
Chapter 20, Problem 17E

Many factors influence the retail price of gasoline. The following table shows the average retail price for a gallon of regular grade gasoline for each year from 2011 through 2014 (U.S. Energy Information Administration website, April 2015).

Year Average Price ($)
2011 3.521
2012 3.618
2013 3.505
2014 3.358
  1. a. Use 2011 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period.
  2. b. Use 2012 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period.

a.

Expert Solution
Check Mark
To determine

Find the price index for the retail price of a gallon of regular grade gasoline over this four-year period by using 2011 as the base year.

Answer to Problem 17E

The price indexes for the retail price of a gallon of regular grade gasoline over this four-year period by using 2011 as the base year are,

YearAverage Price ($)Price relative in Period t
20113.521100
20123.618102.8
20133.50599.5
20143.35895.4

Explanation of Solution

Calculation:

The data shows the average retail price for a gallon of regular grade gasoline for each year from 2011 to 2014.

The price indexes for the retail price of a gallon of regular grade gasoline over this four-year period by using 2011 as the base year are obtained below:

YearAverage Price ($)Price relative in Period t=Price in period tBase period price(100)
20113.5213.5213.521(100)=100
20123.6183.6183.521(100)=102.8
20133.5053.5053.521(100)=99.5
20143.3583.3583.521(100)=95.4

b.

Expert Solution
Check Mark
To determine

Find the price index for the retail price of a gallon of regular grade gasoline over this four-year period by using 2012 as the base year.

Answer to Problem 17E

The price indexes for the retail price of a gallon of regular grade gasoline over this four-year period by using 2012 as the base year are,

YearAverage Price ($)Price relative in Period t
20113.52197.3
20123.618100
20133.50596.9
20143.35892.8

Explanation of Solution

Calculation:

The price indexes for the retail price of a gallon of regular grade gasoline over this four-year period by using 2012 as the base year are obtained below:

YearAverage Price ($)Price relative in Period t=Price in period tBase period price(100)
20113.5213.5213.618(100)=97.3
20123.6183.6183.618(100)=100
20133.5053.5053.618(100)=96.9
20143.3583.3583.618(100)=92.8

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
the following table provides the average price of regular grade gasoline for 4 years. Use 2015 as the reference value, complete the table by calculating the price index for each year. Show all your calculation
Handwritten only
Many factors influence the retail price of gasoline. Suppose the following table shows the average retail price for a gallon of regular grade gasoline for each year from 2011 through 2014. (Round your answers to one decimal place.) Year Average Price ($) 2011 3.531 2012 3.623 2013 3.505 2014 3.368 (a) Use 2011 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period. 2011 price index ?? 2012 price index ?? 2013 price index ?? 2014 price index ?? (b) Use 2012 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period. 2011 price index ?? 2012 price index ?? 2013 price index ?? 2014 price index ??
Knowledge Booster
Background pattern image
Statistics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
College Algebra
Algebra
ISBN:9781938168383
Author:Jay Abramson
Publisher:OpenStax
Text book image
Holt Mcdougal Larson Pre-algebra: Student Edition...
Algebra
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Text book image
Trigonometry (MindTap Course List)
Trigonometry
ISBN:9781337278461
Author:Ron Larson
Publisher:Cengage Learning
Text book image
College Algebra
Algebra
ISBN:9781337282291
Author:Ron Larson
Publisher:Cengage Learning
Text book image
Algebra: Structure And Method, Book 1
Algebra
ISBN:9780395977224
Author:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Publisher:McDougal Littell
Use of ALGEBRA in REAL LIFE; Author: Fast and Easy Maths !;https://www.youtube.com/watch?v=9_PbWFpvkDc;License: Standard YouTube License, CC-BY
Compound Interest Formula Explained, Investment, Monthly & Continuously, Word Problems, Algebra; Author: The Organic Chemistry Tutor;https://www.youtube.com/watch?v=P182Abv3fOk;License: Standard YouTube License, CC-BY
Applications of Algebra (Digit, Age, Work, Clock, Mixture and Rate Problems); Author: EngineerProf PH;https://www.youtube.com/watch?v=Y8aJ_wYCS2g;License: Standard YouTube License, CC-BY