Suppose That a Consumer's Increase in Nominal Income from the Base

question 74

Essay

Suppose that a consumer's increase in nominal income from the base year is exceeded by the inflation level given by a Paasche cost of living index for their level of purchases:
(
<
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Show that this information implies that the consumer is strictly worse-off as compared to the base year. (Hint: Use a revealed preference argument.)

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Definitions:

Legal Parents

Individuals who have legal authority and responsibility for a child, which can arise through biological relationship, adoption, or legal designation.

Adoption

A procedure in which persons become the legal parents of a child who is not their biological child.

Approved By A Judge

Officially sanctioned or authorized by a judge or court official.

Requirement For Adoption

The legal prerequisites and conditions that must be met for an adoption process to be legally recognized and completed.