Скачать презентацию 2 4 Index Numbers LEARNING GOAL Understand the

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2. 4 Index Numbers LEARNING GOAL Understand the concept of an index number; in particular, understand how the Consumer Price Index (CPI) is used to measure inflation. Copyright © 2009 Pearson Education, Inc.

Index Numbers An index number provides a simple way to compare measurements made at different times or in different places. The value at one particular time (or place) must be chosen as the reference value (or base value). The index number for any other time (or place) is index number = value x 100 reference value Copyright © 2009 Pearson Education, Inc. Slide 2. 4 - 2

EXAMPLE 1 Finding an Index Number Suppose the cost of gasoline today is \$3. 20 per gallon. Using the 1975 price as the reference value, find the price index number for gasoline today. Solution: Table 2. 1 shows that the price of gas was 56. 7¢, or \$0. 567, per gallon in 1975. If we use the 1975 price as the reference value and the price today is \$3. 20, the index number for gasoline today is index number = \$3. 20 current price × 100 = 564. 4 \$0. 567 1975 price This index number for the current price is 564. 4, which means the current gasoline price is 564. 4% of the 1975 price. Copyright © 2009 Pearson Education, Inc. Slide 2. 4 - 4

TIME OUT TO THINK Find the actual price of gasoline today at a nearby gas station. What is the gasoline price index for today’s price, with the 1975 price as the reference value? Copyright © 2009 Pearson Education, Inc. Slide 2. 4 - 5

Making Comparisons with Index Numbers EXAMPLE 2 Using the Gas Price Index Use Table 2. 1 to answer the following questions. a. Suppose that it cost \$7. 00 to fill your gas tank in 1975. How much did it cost to buy the same amount of gas in 2005? Solution: a. Table 2. 1 shows that the price index (1975 = 100) for 2005 was 407. 4, which means that the price of gasoline in 2005 was 407. 4% of the 1975 price. So the 1995 price of gas that cost \$7. 00 in 1975 was 407. 4% x \$7. 00 = 4. 074 x \$7. 00 = \$28. 52 Copyright © 2009 Pearson Education, Inc. Slide 2. 4 - 6

Making Comparisons with Index Numbers EXAMPLE 2 Using the Gas Price Index Use Table 2. 1 to answer the following questions. b. Suppose that it cost \$20. 00 to fill your gas tank in 1995. How much did it cost to buy the same amount of gas in 1955? Solution: b. Table 2. 1 shows that the price index (1975 = 100) for 1995 was 212. 5 and the index for 1955 was 51. 3. So the cost of gasoline in 1955 compared to the cost in 1995 was index number for 1955 5. 13 = = 0. 2414 index number for 1995 212. 5 Gas that cost \$20. 00 in 1995 cost 0. 2414 x \$20. 00 = \$4. 83 in 1955. Slide 2. 4 - 7 Copyright © 2009 Pearson Education, Inc.

The Consumer Price Index (CPI), which is computed and reported monthly, is based on prices in a sample of more than 60, 000 goods, services, and housing costs. Copyright © 2009 Pearson Education, Inc. Slide 2. 4 - 8