Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student’s annual purchases. Suppose the following table shows information on the market basket for...

Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student’s annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2017, 2018, and 2019.

The cost of each item in the basket and the total cost of the basket are shown for 2017.

Perform these same calculations for 2018 and 2019, and enter the results in the following table.

**THE TABLE IS ATTACHED**

Suppose the base year for this price index is 2017.

In the last row of the table, calculate and enter the value of the CSPI for the remaining years.

Between 2017 and 2018, the CSPI increased by_____%.

Between 2018 and 2019, the CSPI increased by______%.

Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply.

A. Energy drinks became increasingly popular on college campuses between 2017 and 2019 due to significant improvements in flavor, but this quality change is hard to measure.

B. As the price of calculators rose, fewer students decided to buy them, opting instead to use the free calculators in their cell phones or on their computers.

C. A new mobile device for personal computing became available for purchase.

D. Professors required each student to buy eight textbooks, regardless of the price.

THANK YOU SO MUCH FOR THE HELP!

2017<br>2018<br>2019<br>Price<br>Cost<br>Price<br>Cost<br>Price<br>Cost<br>Quantity in Basket<br>(Dollars)<br>(Dollars)<br>(Dollars)<br>(Dollars)<br>(Dollars)<br>(Dollars<br>Notebooks<br>10<br>30<br>3<br>4<br>Calculators<br>1<br>75<br>75<br>80<br>104<br>Large coffees<br>300<br>2<br>600<br>2<br>Energy drinks<br>75<br>2<br>150<br>4<br>Textbooks<br>90<br>720<br>110<br>120<br>Total cost<br>1,575<br>Price index<br>100<br>

Extracted text: 2017 2018 2019 Price Cost Price Cost Price Cost Quantity in Basket (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars Notebooks 10 30 3 4 Calculators 1 75 75 80 104 Large coffees 300 2 600 2 Energy drinks 75 2 150 4 Textbooks 90 720 110 120 Total cost 1,575 Price index 100

Jun 04, 2022

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Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student’s annual purchases. Suppose the following table shows information on the market basket for...

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