Statistics for Business & Economics, Revised (with XLSTAT Education Edition Printed Access Card)
13th Edition
ISBN: 9781337094160
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
Publisher: Cengage Learning
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Textbook Question
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 ($) |
| 2011 | 3.521 |
| 2012 | 3.618 |
| 2013 | 3.505 |
| 2014 | 3.358 |
- a. Use 2011 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period.
- b. Use 2012 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period.
a.
Expert Solution
To determine
Find the price index for the retail price of a gallon of regular grade gasoline over this four-year period by using 2011 as the base year.
Answer to Problem 17E
The price indexes for the retail price of a gallon of regular grade gasoline over this four-year period by using 2011 as the base year are,
| Year | Average Price ($) | |
| 2011 | 3.521 | 100 |
| 2012 | 3.618 | 102.8 |
| 2013 | 3.505 | 99.5 |
| 2014 | 3.358 | 95.4 |
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:
| Year | Average Price ($) | |
| 2011 | 3.521 | |
| 2012 | 3.618 | |
| 2013 | 3.505 | |
| 2014 | 3.358 |
b.
Expert Solution
To determine
Find the price index for the retail price of a gallon of regular grade gasoline over this four-year period by using 2012 as the base year.
Answer to Problem 17E
The price indexes for the retail price of a gallon of regular grade gasoline over this four-year period by using 2012 as the base year are,
| Year | Average Price ($) | |
| 2011 | 3.521 | 97.3 |
| 2012 | 3.618 | 100 |
| 2013 | 3.505 | 96.9 |
| 2014 | 3.358 | 92.8 |
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:
| Year | Average Price ($) | |
| 2011 | 3.521 | |
| 2012 | 3.618 | |
| 2013 | 3.505 | |
| 2014 | 3.358 |
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Chapter 20 Solutions
Statistics for Business & Economics, Revised (with XLSTAT Education Edition Printed Access Card)
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