On the Planet Hyperion, Every Consumer Who Has Ever Lived

question 50

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 8 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)4.
• B)3.
• C)2.
• D)5.
• E) It is not possible to determine the Paasche price index without further information.

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Definitions:

Carl Jung

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