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 10 respectively, what is the Laspeyres price index of current prices relative to base year prices? (Pick the most nearly correct answer.)

• A)0.50
• B)0.25
• C)1.17
• D)0.67
• E)1

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Definitions:

Plaintiff

The party who initiates a lawsuit by making a complaint against another party, called the defendant, in a court of law.

Strict Liability

A legal doctrine that holds a party responsible for their actions or products, regardless of fault or intent.

Negligence

Not acting with the caution that a reasonably prudent person would use in similar situations, resulting in injury or loss.

Fishing Boat

A vessel used to catch fish in the sea, or on a lake or river, varying in size from small dinghies to large charter boats.