Eastland College

  

Eastland College is concerned about the rising price of textbooks
that students must purchase. To better identify the increase
in the price of textbooks, the dean asks you, the
Economics Department’s star student, to create an index of
textbook prices. The average student purchases three English,
two math, and four economics textbooks. The prices of these
books are given in the accompanying table.
a. Create the price index for these books for all years with a
base year of 2002.
HDI Real GDP per capita
Brazil 0.775 $7,770
Canada 0.943 29,480
Japan 0.938 26,940
Mexico 0.802 8,970
Saudi Arabia 0.768 12,650
United States 0.939 35,750
2002 2003 2004
English textbook $50 $55 $57
Math textbook 70 72 74
Economics textbook 80 90 100
b. What is the percent change in the price of an English textbook
from 2002 to 2004?
c. What is the percent change in the price of a math textbook
from 2002 to 2004?
d. What is the percent change in the price of an economics
textbook from 2002 to 2004?
e. What is the percent change in the market index from 2002
to 2004?

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