Suppose you want to create a price index for the price of a particular physics textbook over ten years in your university bookstore. The price of the book on September 1 of each year is as follows:

a. The base year is 2000. Construct a physics textbook price index.
b. What is the percentage increase in the price of the book between the base year and 2005?
c. What is the percentage increase in the price of the book from 2007 to 2010?
d. Are the data listed above time-series or cross-sectional data? Explain why.

Transcribed Image Text:

Year 2000 2001 2002 2003 2004 2005 Price (S) 85 87 94 104 110 112 Year Price (S) 2006 2007 2008 2009 2010 120 125 127 127 130