1. 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. 2020 Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index Price Cost Quantity in Basket (Dollars) (Dollars) 1 150 10 8 40 3N8Nm 64 2 80 300 800 16 120 1,300 100 2021 Cost Price (Dollars) (Dollars) 104 2 85 2 104 300 850 16 160 1,430 110 Price (Dollars) 134 2 105 5 2022 Cost (Dollars) 134 300 1,050 200 1,716 132
1. 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. 2020 Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index Price Cost Quantity in Basket (Dollars) (Dollars) 1 150 10 8 40 3N8Nm 64 2 80 300 800 16 120 1,300 100 2021 Cost Price (Dollars) (Dollars) 104 2 85 2 104 300 850 16 160 1,430 110 Price (Dollars) 134 2 105 5 2022 Cost (Dollars) 134 300 1,050 200 1,716 132
Chapter6: How Statisticians Measure Inflation
Section6.A: How Statisticians Measure Inflation
Problem 6TY
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