Econ Workshop

Economics 601

Workshop #1

Dustin Chambers                                        Online

Instructions: Please show all of your work.  Turn-in one assignment per group, and make sure to list the names of each student in your group.  Tip: This assignment can be solved very quickly using Microsoft Excel.

1. Suppose that you work for the Bureau of Labor Statistics, and you want to construct a College Student Price Index (CSPI) for college students.  After sending surveys to a large number of students, you determine that the basket will consist of the following items:

• Tuition
• Lodging
• Pizza
• Beer
• Gasoline

In December 2005, you send 10 surveys to randomly-selected students and ask them how much they spend, on a pro-rata basis on each of these categories.  The responses are provided below:

[pic 1]

Each December, you also collect pricing information on the average price of these items:

[pic 2]

Setting 2005 as your base year, 1) compute the College Student Price Index (CSPI) for each year (i.e. 2005, 2006, and 2007), and 2) calculate the inflation rate between 2005 and 2006, and between 2006 and 2007.  Which expenditure categories were most responsible for higher inflation as measured by the percentage changes in the CSPI?

1. The following tables contain U.S. macroeconomic data from the Bureau of Economic Analysis (BEA).  Please fill-in the missing values and answer the follow-up questions: