On the Planet Hyperion Every Consumer Who Has Ever Lived

question 14

Multiple Choice

On the planet Hyperion every consumer who has ever lived has a utility function U(x, y) = min{x, 2y}. The currency of Hyperion is the doggerel. In 1850 the price of x was 1 doggerel per unit and the price of y was 2 doggerels per unit. In 2000, the price of x was 4 doggerels per unit and the price of y was 4 doggerels per unit. The Paasche price index of prices in 2000 relative to prices in 1850 is

• A) 2.
• B) 3.
• C) 1.
• D) 2.67.
• E) not possible to determine without further information.

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Definitions:

False Positives

Incorrect test results indicating the presence of a condition or substance when it is not actually present.

Standardized Scoring

A process of quantifying test or assessment results according to prescribed norms and procedures to ensure comparability.

Construct Validity

The validity of a test assuming a specific theoretical framework that relates the item the test measures, often rather abstract, to some other item that is more easily assessed. If the two sets of measurements correlate, the test is said to have construct validity.

Theoretical Framework

A foundational structure used to outline possible courses of action or to present a preferred approach to an idea or thought, often used in academic research.