Let Us Reconsider the Case of Ronald in Problem 4

question 11

Multiple Choice

Let us reconsider the case of Ronald in Problem 4. Let the prices and consumptions in the base year be as in situation D, where p₁ = $3, p₂ = $1, x₁ = 5, and x₂ = 15. If in the current year, the price of good 1 is $1 and the price of good 2 is $1, and his current consumptions of good 1 and good 2 are 25 and 20 respectively, what is the Laspeyres price index of current prices relative to base year prices? (Pick the most nearly correct answer.)

• A) 0.67
• B) 1.50
• C) 0.25
• D) 0.50
• E) 1

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Definitions:

Looking-Glass Self

A social psychological concept that suggests individuals form their self-image based on how they believe others perceive them.

Generalized Other

A concept in sociology representing the attitudes, viewpoints, and expectations of society as a whole that individuals take into account during interaction.

Concrete Operational Stage

A stage in Piaget's theory of cognitive development where children (aged 7-12 years) gain the ability to think logically about concrete events.

George Herbert Mead

An American philosopher, sociologist, and psychologist known for his work on the development of the self and the theory of symbolic interactionism.