Suppose you want to create a price index for the price of a particular

physics textbook over ten years in your university book store. the price

of the book on September 1 each year is as follows:

year price ($) year price ($)

2000 85 2005 112

2001 87 2006 120

2002 94 2007 125

2003 104 2008 127

2004 110 2009 127

(a) Construct price index for the textbook [4]

(b) What is the price increase between the base year and 2005? [2]

(c) What is the price increase between the base 2007 and 2009? [2]

(d) Are the data listed above time series or cross sectional?explain. [2]