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

question 79

Essay

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

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Definitions:

Blood

A type of bodily fluid in humans and other animals that delivers necessary substances such as nutrients and oxygen to the cells and transports metabolic waste products away from those same cells.

Cardiac Muscle

A specialized form of muscle found in the heart, characterized by its ability to contract involuntarily and rhythmically.

Heart

A muscular organ in most animals, including humans, which pumps blood through the circulatory system by rhythmic contractions.

Dendrite

Branching processes of a neuron; receives stimuli and conducts potentials toward the cell body.