Suppose you want to create a price index for the price of a particular physics textbook over
Question:
Suppose you want to create a price index for the price of a particular physics textbook over 10 years in your university bookstore. The price of the book on September 1 of each year is as follows:
Year | Price ($) | Year | Price ($) |
2009 | 85 | 2015 | 120 |
2010 | 87 | 2016 | 125 |
2011 | 94 | 2017 | 127 |
2012 | 104 | 2018 | 127 |
2013 | 110 | 2019 | 130 |
2014 | 112 |
a. The base year is 2009. Construct a physics textbook price index.
b. What is the percentage increase in the price of the book between the base year and 2014?
c. What is the percentage increase in the price of the book from 2016 to 2019?
d. Are the data listed above time-series or cross-sectional data? Explain why.
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a Using 2009 as the base year means that we choose 85 as the base price We thus divide the actual pr...View the full answer
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