The Following Table Shows the Consumption Goods Categories That Statistics

question 152

Essay

The following table shows the consumption goods categories that Statistics Canada uses to compute the consumer price index, their weights as percentages in a typical consumer's total expenditure, as well as some hypothetical prices of those generic goods. Since the weights are adjusted such that their sum is 100, the year 1 prices are given as price ratios p¹/p⁰, where p⁰ is the base year price.

a.Calculate the consumer price index in Year 1 and Year 2.
b.Calculate the inflation rate in Year 1, Year 2, and between Year 1 and Year 2.
c.Explain how the weights in column 2 were determined. Discuss the meaning of "Price of food."

---

Definitions:

Population Parameter

A numerical value that represents a characteristic of an entire population, such as mean or variance.

Sample Size

The number of subjects or units selected from a population to be studied in a statistical sample.

Season Ticket Holders

Individuals or entities that have purchased tickets granting them access to all or a set number of events in a series, typically for sports events or performances, for a particular season.

Standard Normal Distribution

A probability distribution that has a mean of zero and a standard deviation of one, used as the basis for z-scores in statistics.