Remember That the Laspeyres Price Index Uses the Old Quantities

question 32

Multiple Choice

Remember that the Laspeyres price index uses the old quantities for the weights.In 1991, good x cost $5 and good y cost $1.The current price of good x is $7 and the current price of good y is $6.In 1991 the consumption bundle was (x, y) = (2, 4) .The current consumption bundle is (x, y) = (5, 3) .The Laspeyres index of current prices relative to 1991 prices is closest to which of the following numbers?

• A)3.79
• B)2.71
• C)0.26
• D)1.89
• E)1.26

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Definitions:

-ile

A suffix typically used in English to denote an ability or capacity within a noun, indicating a quality or condition.

-ous

A suffix indicating possession or full of a certain quality, used in the formation of adjectives.

Cystocele

A condition where the bladder herniates into the vaginal wall due to weakness in the pelvic floor muscles.

-pnea

is a suffix related to breathing, used in terms to describe different types of breathing patterns or conditions.