Stats University of Phoenix

Complete the following indexes questions from the Statistical Techniques in Business & Economics text:

o    Ch. 18, exercises 27, 28, 33, and 34 (Lind)  ANTHONY

o    Ch. 18, exercise 56 (Lind)

Chapter 18 exercise 27.

SPI for Margarine = (0.89/0.81)*100=109.88

SPI for Shortening = (0.94/0.84)*100=111.90

SPI for Milk = (1.43/1.44)*100 = 99.31

SPI for Potato chips = (3.07/2.91)*100=105.50

Chapter 18 exercise 28.

Simple aggregate price Index = [(∑P1)/(∑P0)]*100

= [(0.89+0.94+1.43+3.07)/(0.81+0.84+1.44+2.91)]*100

= (6.33/6)*100

= 105.50

33.

Item | Simple Price Index |

RC-33 | 0.600.50×100=120 |

SM-14 | 0.901.20×100=75 |

WC-50 | 1.000.85×100=117.65 |

.

34. Compute a simple aggregate price index for 2004. Use 2000 as the base period

Item 2000 2004 2000 2004

P0 P1 Q0 Q1

RC-33 0.50 0.60 320 340

SM-14 1.20 0.90 110 130

WC-50 0.85 1.00 230 250

Simple Price Index = ∑P1∑P0×100=0.60+0.90+1.000.50+1.20+0.85×100=2.502.55×100=98.04

Ch. 18, exercise 56

Year | TV Commercial | Game Ticket | CPI | Simple Price Index for Commercials | Simple Price Index for Tickets |

1967 | $42,000 | $8.00 | 100 | 100.00 | 100.00 |

1988 | 525,000 | 100 | 335 | 1250.00 | 1250.00 |

1999 | 1,600,000 | 325 | 499 | 3809.52 | 4062.50 |

2001 | 2,100,000 | 325 | 530.4 | 5000.00 | 4062.50 |

2002 | 1,900,000 | 400 | 538.8 | 4523.81 | 5000.00 |

I notice that the price of tickets and commercials tend to increase much greater than the increase in CPI. In addition, the increase in the cost of tickets and cost of commercials are very similar and seem to follow each other. As far as the demand increase, it may be caused by the increase in the cost of advertising.