Let Us Reconsider the Case of Ronald in Problem 4

question 16

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

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Definitions:

Brachioradialis

A muscle of the forearm that flexes the forearm at the elbow, particularly evident when the forearm is in a midpronation position.

Pronator Teres

A muscle of the forearm that helps in pronating the forearm, turning the hand so the palm faces downwards.

Elevates

To lift or move something or someone to a higher place, position, or level.

Scapula

A flat, triangular bone located in the upper back, also known as the shoulder blade, that connects the humerus with the clavicle.