Let Us Reconsider the Case of Ronald in Problem 4

question 1

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 $2, 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)1.17
• B)2.17
• C)0.75
• D)0.50
• E)1.75

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Definitions:

Microvilli

Tiny hair-like structures on the surface of cells in the small intestine, increasing surface area for absorption of nutrients.

Columnar Cells

Elongated, pillar-like cells, often found lining organs such as the intestines or respiratory tract, involved in absorption, secretion, or protection.

Transcription

Process of forming RNA from a DNA template.

Translation

Synthesis of polypeptide chains at the ribosome in response to information contained in mRNA molecules.