TABLE 16-15
Given Below Are the Prices of a Basket

question 29

Short Answer

TABLE 16-15
Given below are the prices of a basket of four food items from 1996 to 2000.
$\begin{array}{ccccc}\text { Year } & \begin{array}{c}\text { Wheat } \\\text { (\$/Bushel) }\end{array} & \begin{array}{c}\text { Corn } \\\text { (\$/Bushel) }\end{array} & \begin{array}{c}\text { Soybeans } \\\text { (\$/Bushel) }\end{array} & \begin{array}{c}\text { Milk } \\\text { (\$/hundredweight) }\end{array} \\\hline 1996 & 4.25 & 3.71 & 7.41 & 15.03 \\1997 & 3.43 & 27 & 7.55 & 13.63 \\1998 & 2.63 & 23 & 6.05 & 15.18 \\1999 & 2.11 & 1.97 & 4.68 & 14.72\\2000 & 2.16 & 1.9 & 4.81 & 12.32\end{array}$

$\begin{array}{lllll}\end{array}$

-Referring to Table 16-15, what is the Laspeyres price index for the basket of four food items in 1998 that consisted of 50 bushels of wheat, 30 bushels of corn, 40 bushels of soybeans and 80 hundredweight of milk in 1996 using 1996 as the base year?

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Definitions:

Behavioral Economics

A branch of economics that uses social and psychological factors in understanding decision making. It is particularly concerned with the limits of rationality in those decisions.

Sociology

The study of social behavior, society, patterns of social relationships, social interaction, and culture.

Psychology

the scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Threats

Potential sources of harm or adverse effects to something or someone.