Suppose the typical consumer only purchases food and clothing,and her utility can be expressed as .
Currently,food costs $5 per unit and clothing costs $2 per unit.Her income is $70.If the price of food increases to $6,compare the resulting Laspeyres price index with a true cost of living index.

Question

Suppose the typical consumer only purchases food and clothing,and her utility can be expressed as  .
 Currently,food costs $5 per unit and clothing costs $2 per unit.Her income is $70.If the price of food increases to $6,compare the resulting Laspeyres price index with a true cost of living index.

Quizplus · Accepted Answer

The Answer of Suppose the typical consumer only purchases food and clothing,and her utility can be expressed as  .
 Currently,food costs $5 per unit and clothing costs $2 per unit.Her income is $70.If the price of food increases to $6,compare the resulting Laspeyres price index with a true cost of living index.

Suppose the Typical Consumer Only Purchases Food and Clothing,and Her