ECO 2010: Principles of Macroeconomics Term Paper Instructions 1. Conduct a survey of the current prices of the items in the market basket listed on the back of this form. The items on this list are from a 1989 New York City Department of Consumer Affairs average weekly market basket for a family of four. The 1989 prices listed on back are the average prices for name-brand commodities in Denver area supermarkets. Please try to find the current price for the same unit size as that listed. Report the total price for the package, not the price per ounce. For produce and meats, report the price per pound. If the store in which you conduct the survey does not have the name brand listed on the form, please report the price of a similar, nationally recognized name-brand that is not discounted or subject to a special promotion. Be aware that many firms have reduced the quantity sold in standard package sizes in order to disguise price increases. For example, it may be hard to find a one-pound can of coffee. If the listed item is not offered in the same unit size, record the current price in the \"2020 PRICE\" column and record the current size in the \"2020 SIZE\" column. Then, adjust the current package price to account for the reduction in unit size according to the following formula and report it in the rightmost column labeled \"ADJUSTED PRICE\". If there has been no change in size, leave the \"2020 SIZE\" column blank and report the same price in both \"2020 PRICE\" and the \"ADJUSTED PRICE\" column Adjusted price = 2020 price per unit* 1989 unit size Sum the prices of these commodities to obtain the cost of buying the unadjusted basket and adjusted basket in 2020. 2. Construct a simple Consumers Price Index using 1989 as the base year according to the following formula: Cost in year in question Index 89 = ------------------------------ * 100 Cost in base year 1989 3. Year Adjusted Basket Index # 1989 _____ 2020 _____ Write an essay on the results of your survey. Be sure to mention the price index numbers calculated above and discuss the rate of inflation they reveal. Be sure to mention: (A) the official government CPI price index for this period and the rate of inflation indicated by the CPI, (B) the rate of inflation revealed by your survey and (C) the impact, if any, of disguised inflation. Include the completed survey form on the reverse side as an appendix to your paper. I will not accept typewritten or photocopied price surveys. Erick Lee Erickson, Ph.D Professor of Economics Name ______________________________________ Store Name ___________________________________ ITEM 1 lb fresh mushrooms 1 lb bananas 1 head lettuce 5 lb potatoes 1 bag microwave pop corn 1 lb potato chips 6 pack cola 6 pack beer 48 tea bags 1 lb coffee 1 pkg onion soup mix 1 lb peanut butter 1 lb strawberry preserve 1 can peas 1 can tuna 1 lb spaghetti 16 oz tomato sauce 1 can whole tomatoes 5 lb flour 1 lb corn flakes 32 oz corn oil 1 qt mayonnaise 1 lb rice 1 loaf bread 1 lb sandwich cookies 1 lb cleanser 32 oz glass cleaner 2 lb detergent 75 sq ft aluminum foil 10 4-gal Garbage Bags 6 rolls bathroom tissue 16 oz shampoo 100 tablets asprin 32 oz bleach 1 chicken 1 lb ground beef 1 lb steak 1 lb fish fillets 1 doz large eggs 1 gal 2% milk 1 lb buter 1 lb cheddar cheese 1 lb bacon 1 qt vanilla ice cream 1 qt orange juice 1 lb frozen green beans 1 lb frozen leaf spinach TOTAL Date of survey ___________ Location ______________________ BRAND 1989 PRICE 2020 PRICE Campbell's Gourmet Dole Campbell's Hydroponic Select Idaho Baking Orv Redenbakers Gourmet Lay's Pepsi Miller High Life Lipton Supreme Blend Columbian Lipton Peter Pan Smuckers LeSuer Very Young Starkist Solid White Fratelli de Cecco Prego Marinara-Style Del Monte Whole Peel Pilsbury All-Purpose Kellogs Mazola Hellmann's Carolina Enriched Wonder Enriched Oreos Comet Windex All-Temp Cheer Reynolds Wrap Hefty Small White Cloud Prell Bayer Clorox Fresh-Scent Perdue Fresh Sirloin Patties Loin Shell Grey Sole Farm Fresh Meadow Gold Land O Lakes Kraft 100% Natural Osar Meyer Haggen Dazs Tropicanna Birds Eye Whole Birds Eye Whole $1.76 $0.60 $0.92 $1.75 $2.38 $2.55 $1.95 $3.35 $2.19 $4.17 $1.05 $2.49 $2.45 $0.97 $1.40 $1.29 $1.33 $0.89 $1.26 $1.95 $2.79 $2.19 $1.37 $1.47 $2.63 $0.68 $2.09 $3.08 $2.29 $2.29 $2.20 $3.00 $4.31 $1.00 $2.33 $1.85 $3.25 $3.82 $1.02 $2.50 $2.09 $4.03 $3.10 $3.06 $1.89 $1.21 $1.20 _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ $99.46 _____ 2020 Size ADJUSTED (if changed) PRICE _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____