Perform these same calculations for 2021 and 2022, and enter the results in the following table. Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index Quantity in Basket 1 150 10 8 40 Price (Dollars) 64 Suppose this price index uses 2020 as the base year. 2020 2 80 2 3 Cost (Dollars) 64 300 800 16 120 1,300 100 2021 Price Cost (Dollars) (Dollars) 104 2 85 2 4 In the last row of the table, calculate and enter the value of the UPI for the remaining years. 104 Between 2020 and 2021, the UPI increased by 10%. Between 2021 and 2022, the UPI increased by Price Cost (Dollars) (Dollars) 134 2 105 4 5 2022 20%. Which of the following, if true, would illustrate why price indexes such as the UPI might overstate inflation in the cost of going to college? Check all that apply. The quality of content provided by streaming services improved dramatically from 2020 to 2022. Many companies invested heavily in the actors cast for their original series, but this quality change is hard to measure. As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all, instead using the copies on reserve in the library. Professors required each student to buy 10 textbooks, regardless of the price.
Perform these same calculations for 2021 and 2022, and enter the results in the following table. Streaming services Iced coffees Textbooks Notebooks Energy drinks Total cost Price index Quantity in Basket 1 150 10 8 40 Price (Dollars) 64 Suppose this price index uses 2020 as the base year. 2020 2 80 2 3 Cost (Dollars) 64 300 800 16 120 1,300 100 2021 Price Cost (Dollars) (Dollars) 104 2 85 2 4 In the last row of the table, calculate and enter the value of the UPI for the remaining years. 104 Between 2020 and 2021, the UPI increased by 10%. Between 2021 and 2022, the UPI increased by Price Cost (Dollars) (Dollars) 134 2 105 4 5 2022 20%. Which of the following, if true, would illustrate why price indexes such as the UPI might overstate inflation in the cost of going to college? Check all that apply. The quality of content provided by streaming services improved dramatically from 2020 to 2022. Many companies invested heavily in the actors cast for their original series, but this quality change is hard to measure. As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all, instead using the copies on reserve in the library. Professors required each student to buy 10 textbooks, regardless of the price.
Chapter6: Tracking The U.s. Economy
Section: Chapter Questions
Problem 4.8P
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Question
1. Calculating inflation using a simple price index.
Transcribed Image Text:Perform these same calculations for 2021 and 2022, and enter the results in the following table.
Streaming services
Iced coffees
Textbooks
Notebooks
Energy drinks
Total cost
Price index
Price
Cost
Quantity in Basket (Dollars) (Dollars)
1
64
64
150
300
800
16
120
10
8
40
Suppose this price index uses 2020 as the base year.
2020
2
80
2
3
1,300
100
2021
Cost
Price
(Dollars) (Dollars)
104
2
85
2
4
In the last row of the table, calculate and enter the value of the UPI for the remaining years.
104
Between 2020 and 2021, the UPI increased by 10%. Between 2021 and 2022, the UPI increased by
Price
Cost
(Dollars) (Dollars)
134
2
105
4
5
2022
20%.
Which of the following, if true, would illustrate why price indexes such as the UPI might overstate inflation in the cost of going to college? Check all
that apply.
The quality of content provided by streaming services improved dramatically from 2020 to 2022. Many companies invested heavily in the
actors cast for their original series, but this quality change is hard to measure.
As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all,
instead using the copies on reserve in the library.
Professors required each student to buy 10 textbooks, regardless of the price.
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