Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 22.A, Problem 4TY
To determine
The college price index for 2017.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Examine the following information as reported for the foods below in the years 2010
and 2019.
2010
2019
Item
Price (S)
Quantity
Price (S)
Quantity
Eggs (one dozen)
$2.75
27
$3.37
40
Chicken (500 g)
$3.20
11
$3.57
7
Bread (675 g)
$2.28
18
$2.83
23
a) Compute a simple price index for each of the items, using the year 2010 as the
base year. Enter them in the same order as above: Eggs, Chicken, Bread. Round
answers to 1 decimal.
b) Compute a simple aggregate price index. Use 2010 as the base period. Round to
one decimal place.
c) Compute the Laspeyres price index for 2019 using 2010 as the base year. Round
to one decimal place.
d) Determine a value index for 2019, using 2010 as the base year. Round to one
decimal place.
The Consumer Price Index (CPI) is a measure of the
average change in price over time from a designated
reference period, at which it equals 100. The index is
based on prices of basic consumer goods and services.
The table provided lists the CPI for several years from
1960 to 2012. If the price change in cars parallels the
change in the CPI, what would a car sell for (to the
nearest dollar) in 2012 if a comparable model sold for
$7,500 in 1999?
Year
CPI
1960
29.6
1973
1986
44.4
109.6
156.9
1999
2012
229.6
In 2012, a car would sell for approximately $ 58,176
(Round to the nearest dollar.)
Discuss the Price Index most commonly used in your country. How is it calculated?
Chapter 22 Solutions
Economics: Principles & Policy
Knowledge Booster
Similar questions
- Define the term Consumer Price Index?arrow_forwardThe Consumer Price Index isarrow_forwardSuppose that before the end of the year a typical consumer purchased 125 apples, 60 bananas, and 85 oranges. Year 1 Year 2 Price of apple Price of banana 0.75 $ 0.90 0.20 0.45 Price of orange 24 0.25 $ 0.60 What is the price index for year 2, using year 1 as the base year (round to the nearest full number)?arrow_forward
- Market Commodity Basket Milk Eggs Bread Quantity 10 gallons 10 dozen 10 loaves 2010 2011 Price price per per Unit unit $2.00 $2.50 $2.00 $3.00 $2.00 $3.00 Use the Table above to answer the following questions. (Where applicable, round your answers to two decimal places) a) If 2010 is the base year in the table shown above, the price index for the year 2010 is b) If 2010 is the base year in the table shown above, the price index for the year 2011 c) Considering the data in the table shown above and 2010 as the base year, the inflation rate in 2011 is %arrow_forwardHow can I find the Consumer Price Indexarrow_forwardSuppose that the index of wholesale-to-retail beef price index for 2018 was 1.35 and the base year of this index was 2006. Relative to 2006, beef prices in 2018 were higher(lower) and by how much?arrow_forward
- The total price of purchasing a basket of goods in the United States over four years is: year 1=$940, year 2=$970, year 3=$1000, and year 4=$1070. Using year 2 as the base year, calculate the value of the price index in year 4.arrow_forwardWhat are the differences between the Consumer Price Index and the Producer Price Index?arrow_forwardYou are employed by the state bureau of economic development. There is a demand for a leading economic index to review past economic activity and to forecast future economic trends in the state. You decide that several key factors should be included in the index: number of new businesses started during the year, number of business failures, state income tax receipts, college enrollment, and the state sales tax receipts. Here are the data for 2000 and 2018. 2000 2018 New businesses 1,240 1,325 Business failures 600 496 State income tax receipts ($ millions) 185.2 220.8 College student enrollment 242,299 291,291 State sales tax ($ millions) 55.1 57.4 The weights you assign are: new businesses 15%, business failures 10%, income tax 42%, enrollment 13% and sales tax 20%. b. Compute the leading economic indicator for 2018. (Round your answer to 2 decimal places.) c. Interpret the indexes. (Round your answer to 2 decimal places.) Economic activity has (increased or decreased) _____%…arrow_forward
- Q2. Go to the Statistics Canada website https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000501 to view the annual average Consumer Price Index for Canada. Change the Reference period years from 1999 to 2021 and click Apply to see the updated data table. Answer the following questions and provide data and calculations where necessary In which ways might the CPI data on food not accurately reflect what is really happening to prices in this product category?arrow_forwardThe following figure is an index (base 1850) of average real wages of skilled workers in London between 1264 and 2001. Based on this information, which of the following statements is correct? Real wage index (1850-100) 8001 700 600- 500- 400- 300- 200- 100- 0 1260 1334 Malthusian trap Escape 1408 1482 1556 1630 1704 1778 1852 1926 2000 Smith Malthus Some of the rapid rise in wages depicted can be attributed to inflation. Malthus was incorrect in his assessment of the historical data. London was able to escape from the Malthusian trap by reducing its population growth rate. The shape of the graph would be the same even if a different year was used as the base year.arrow_forwardThe variable-based index values of wholesale bread prices for the years 1987-2003 are given below. Given the given, what is the fixed basis wholesale bread price index for 2001? year variable-based index values of wholesale bread prices 1987 97 1988 63 1999 74 2000 113 2001 94 2002 147 2003 78arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Macroeconomics: Principles and Policy (MindTap Co...EconomicsISBN:9781305280601Author:William J. Baumol, Alan S. BlinderPublisher:Cengage Learning
Macroeconomics: Principles and Policy (MindTap Co...
Economics
ISBN:9781305280601
Author:William J. Baumol, Alan S. Blinder
Publisher:Cengage Learning