On the Planet Homogenia Every Consumer Who Has Ever Lived

question 18

Multiple Choice

On the planet Homogenia every consumer who has ever lived consumes only two goods, x and y, and has the utility function U(x, y) = xy. The currency in Homogenia is the fragel. In this country in 1900, the price of good 1 was 1 fragel and the price of good 2 was 2 fragels. Per capita income was 84 fragels. In 2000, the price of good 1 was 4 fragels and the price of good 2 was 2 fragels. The Laspeyres price index for the price level in 2000 relative to the price level in 1900 is

• A) 4.50.
• B) 2.50.
• C) 2.
• D) 3.
• E) not possible to determine from this information.

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Definitions:

Hypothalamus

A region of the brain that controls various autonomic functions, including temperature regulation, hunger, thirst, and the release of hormones.

Stomach

The stomach is a muscular organ located in the upper abdomen that receives food from the esophagus, producing gastric acid and digestive enzymes to aid in food digestion.

Orexin

A type of neurotransmitter that plays an important role in regulating wakefulness, appetite, and arousal.

Digestive Track Hormone

Hormones produced by the gastrointestinal tract that regulate various aspects of digestion, including enzyme secretion and gut motility.