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The iPhone and the Consumer Price Index

The Consumer Price Index is a measure of general inflation in the economy using the “market basket of goods” as defined by the Bureau of Labor Statistics. For this particular forum, it is important to understand the variables that have created some issues for the Consumer Price Index and how they can be accounted for outside of this particular measure of inflation.

Upon completion of this assignment, you should be able to:

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  • Evaluate the meaning of various price indices to business decisions.

Resources

  • Bible
  • Website: http://www.khanacademy.org
  • Media: Chapter 16, Animations 16.1–16.5
  • File: Workshop Six Chapter 16 Transcripts

Background Information

The Bureau of Labor Statistics tries to measure the Consumer Price Index using a market basket of goods and services including food and beverages, housing, apparel, transportation, medical care, recreation, education, communication, and other goods and services. The introduction of new technologies can affect the CPI and will be a focus for this forum.

Instructions

  1. Review the following animations. To move through the animation sequence, click Next until you reach the end of that animation sequence. These animations will prepare you for the discussions and other assignments in this and upcoming workshops.
    1. Animation 16.1
    2. Animation 16.2
    3. Animation 16.3
    4. Animation 16.4
    5. Animation 16.5
  2. Navigate to the threaded discussion and respond to the following:
    1. In October 2011, Apple introduced the iPhone 4S, which had new features, including camera and voice control, but sold at the same price as the previous iPhone model.
      1. How did the introduction of the iPhone 4S affect the Consumer Price Index?
      2. What factors in the calculation of the CPI caused this effect?
  3. Your initial post is due by the end of the fourth day of the workshop.
  4. Read and respond to at least two of your classmates’ postings, as well as all instructor follow-up questions directed to you, by the end of the workshop.
  5. Your postings should also:
    1. Be well developed by providing clear answers with evidence of critical thinking.
    2. Add greater depth to the discussion by introducing new ideas.
    3. Provide clarification to classmates’ questions and provide insight into the discussion.

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