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Distinguish between the
Index (PPI)
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- Examine the following information as reported for the foods below in the years 2010 and 2019. 2010 2019 Item Price (S) Quantity Price (S) Quantity Eggs (one dozen) $2.75 27 $3.37 40 Chicken (500 g) $3.20 11 $3.57 7 Bread (675 g) $2.28 18 $2.83 23 a) Compute a simple price index for each of the items, using the year 2010 as the base year. Enter them in the same order as above: Eggs, Chicken, Bread. Round answers to 1 decimal. b) Compute a simple aggregate price index. Use 2010 as the base period. Round to one decimal place. c) Compute the Laspeyres price index for 2019 using 2010 as the base year. Round to one decimal place. d) Determine a value index for 2019, using 2010 as the base year. Round to one decimal place.Distinguish between the Consumer Price Index (CPI) and the Producer Price (6)Index (PPI)The Consumer Price Index measures the overall level of prices faced by:
- Distinguish between the Consumer Price Index (CPI) and the Producer Price Index (PPI)Why is it essential to calculate the producer price index?The consumer price index (CPI) is a fixed-weight index. It compares the price of a fixed bundle of goods one year with the price of the same bundle of goods in some base year. Calculate the price of a bundle containing 100 units of good X, 150 units of good Y, and 25 units of good Z in 2008, 2009, and 2010. Convert the results into an index by dividing each bundle price figure by the bundle price in 2008. Calculate the percentage change in your index between 2008 and 2009 and again between 2009 and 2010.Was there inflation between 2009 and 2010? QUANTITY CONSUMED 2008 PRICES 2009 PRICES 2010 PRICES GOOD 100 $1.00 $1.50 $1.75 Y 150 1.50 2.00 2.00 25 3.00 3.25 3.00
- Hanna, who is a 5-year-old girl, eats nothing but pasta, yogurt, and lemonade. Each month her parents buy 27 pounds of pasta, 69 packages of yogurt, and 17 bottles of lemonade. These three items make up a basket of goods and services similar to the much larger basket used by the Bureau of Labor Statistics (BLS) when computing the official Consumer Price Index (CPI). The table below lists the average price for each item in this basket for the past four years. Hanna's Meals Pasta (dollars Yogurt (dollars per Lemonade (dollars per Year per pound) $1.86 1.99 package) bottle) $1.04 $2.22 1.11 2.38 2.13 1.19 2.55 2.73 4 2.28 1.27 Instructions: Round your answers to 2 decimal places. a. For each year, calculate the CPI, using year 1 as the base year. In year 1, the CPI was In year 2, the CPI was In year 3, the CPI was In year 4, the CPI was b. For each year, calculate the CPI, using year 3 as the base year. In year 1, the CPI was In year 2, the CPI was In year 3, the CPI was In year 4, the…Calculate the real priceWhich is the most commonly used price index? ( name of index)
- The following table lists the per gallon prices of gas and milk for the months of April, May, and June. Assume that the typical consumer buys 60 gallons of gas and 4 gallons of milk each month, and that April is the base period. What is the consumer price index for May?Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period. 2000 Qty. (Ib) 2000 2009 Price ($/lb) Seafood Price ($/lb) Halibut 75,090 2.01 2.33 Lobster 83,080 3.72 3.09 Tuna 50,779 1.87 1.97 (a) Compute a price relative for each type of seafood. (Round your answers to one decimal place.) Seafood Price Relative Halibut Lobster Tuna (b) Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.) I2009 = Comment on the change in seafood prices over the nine-year period. (Enter your percentage as a positive value. Round your answer to one decimal place.) Seafood prices have increased v by | % over the 9-year period according to the index.Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period.Seafood 2000 Qty. (lb) | 2000 Price ($/lb) | 2009 Price ($/lb)Halibut 75,090 1.91 2.33Lobster 83,080 3.72 3.09Tuna 50,779 1.87 1.97(a)Compute a price relative for each type of seafood. (Round your answers to one decimal place.)Seafood Price RelativeHalibut 122.0 Lobster _________ Tuna 105.3 (b)Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.)I2009 = ___________ Comment on the change in seafood prices over the nine-year period. (Enter your percentage as a positive value. Round your answer to one decimal place.)Seafood prices have decreased by ______ % over the 9-year period according to the index.