COST OF EDUCATION The accompanying Table 1.2 on page 14 gives the average annual total fix...

COST OF EDUCATION The accompanying Table 1.2 on page 14 gives the average annual total fixed costs (tuition, fees, room and board) for undergraduates by institution type in constant (inflation-adjusted) 2002 dollars for the academic years 1987–1988 to 2002–2003. Define the cost of education index(CEI) for a particular academic year to be the ratio of the total fixed cost for that year to the total fixed cost for the base academic year ending in 1990. For example, for 4-year public institutions in the academic year ending in 2000, the cost of education index was

a. Compute the CEI for your particular type of institution for each of the 16 academic years shown in the table. What was the average annual increase in CEI over the 16-year period for your type of institution?

b. Compute the CEI for all four institution types for the academic year ending in 2003 and interpret your results.

c. Write a paragraph on the cost of education index. Can it continue to rise as it has? What do you think will happen eventually?

TABLE 1.2 Average Annual Total Fixed Costs of Education (Tuition, Fees, Room and Board) by Institutional Type in Constant (Inflation-Adjusted) 2002 Dollars

All data are unweighted averages, intended to reflect the average prices set by institutions. SOURCE: Annual Survey of Colleges. The College Board, New York, NY.