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Consider a ctional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information
Consider a ctional 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 (SP1 and the prices of each of the goods in 2010, 2011, and 2012. The cost of eadi item in the basket and the total cost of the basket are shown for 2010. Perfonn these same calculations for 20.11 and 2012, and enter the results ln the followlng table. 2|] 1 0 201 1 20 1 2 Price Dost Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) Notebooks 10 3 3o 3 E 4 \\:| Calculators 1 1'5 7'5 80 E 104 \\:| Large coffees 300 2 500 2 E 2 \\:| Energy drinks ?5 2 150 4 E 5 \\:| Textbooks 3 90 no 1 10 E 120 \\:| Total cost 5 5 1,575 5 E 5 \\:| price index 5 5 100 5 \\:| 5 E Suppose the base year for this price index is 2010. In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Between 2010 and 2011, the CSPI increased b_ . Between 2011 and 2012, the CSP[ increased by . which of the following, if true, would illustrate why price indexes such as the CSP[ might overstate inflation in the cost of going to college? Check all that apply. D The quality of textbooks increased dramatically from 2010 to 2012, with textbook companies bundling new online study aids with their books. D As the price of energy drinks increased relative to the price of coffee between 2010 and 2012, students decreased their consumption of energy drinks and increased their consumption of coffee. D A new type of personal transporter, which made it easier to get around places like university campuses, became available for purchase. D Professors required each student to buy eight textbooks, regardless of the price
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