I Etienne Laspeyres Developed a Method in the Latter Part

question 36

Multiple Choice

i. Etienne Laspeyres developed a method in the latter part of the 19th century to determine a
Weighted index using base-period weights.
ii. If we are constructing a weighted index of the price of food for 2000 using the Laspeyres'
Method and 1982-84 = 100, we use the price of food in the base period, q0, as weights.
iii. The Laspeyres' method allows for a meaningful comparison of prices over time; however, if does
Not reflect changes in buying patterns over time.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

Differentiate between a change in demand and a change in quantity demanded.

Recognize how consumer income changes impact the demand for normal and inferior goods.

Analyze the effects of price changes on the demand for related goods.

Explain the concept of quantity demanded in market economics.

---

Definitions:

Critical Values

Thresholds determined by the significance level of a test, marking the boundary within which the null hypothesis is accepted or rejected.

Pearson Correlation

A measure of the linear relationship between two continuous variables, ranging from -1 to 1, where 1 means a perfect positive correlation.

Pearson Correlation

Another name for Pearson r, indicating the degree of linear relationship between two variables.

Null Hypothesis

A statement or hypothesis that suggests there is no statistical significance between the specified sets of observations.