Problem 1. When John started his freshman year at GWU, his parents decided to make this basket of items that included his spending on major items so they can track his spending and compute inflation rates for the basket. John is now a junior (finishing up his 6th semester at GWU). His parents have the complete data until the end of 5th semester. To save you computation time, I included only three items from the basket:

Item 1: Textbook

Item 2: Eating at High-End Restaurants

Item 3: Electronic items/Cell phones/laptop/tablet

Quantity of items Average Price of each item ($)

t Semester 1 2 3 t Semester 1 2 3

1 S1 7 3 5 1 S1 $70 $35 $200

2 S2 5 5 2 2 S2 $100 $50 $500

3 S3 8 2 3 3 S3 $60 $80 $400

4 S4 10 4 0 4 S4 $80 $40 $300

5 S5 6 5 1 5 S5 $120 $50 $900

6 S6 - - - 6 S6 - - -

Use the information provided above, answer (compute) all the questions (CPIs) below:

a) Laspeyres price index for Semester 4 (S4) - 1 point

b) Paasche Price Index for Semester 4 (S4) - 1 point

c) Fisher for Price Index for Semester 4 (S4) - 0.5 point

d) Lowe's Price Index for Semester 4 (S4) - 1 point -- For this, use S3 basket as the base

e) Establish a Run chart (Chapter 13) for textbook price only (identify the center line and upper/control limits using the data provided) --- here, your answer can be based on the total spending on the textbook per semester or average spending on the textbook - you decide on the chart you prefer --- All I want for you is to establish a norm (centerline and upper/lower control limits based on 6-sigma rule) - 1 point