Select the National Unemployment Rate from the Subject menu. There are two sources you should be looking at: (1) The new release from June 2. (2)…
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October 2, 2020
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The following historical data describe monthly purchase by an average farm family: Commodity 2002 2012 Price Qty Price Qty Milk (L) $1.30 30 $1.40 30…

The following historical data describe monthly purchase by an average farm family:

Commodity              2002                          2012

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                               Price    Qty               Price       Qty 

Milk (L)                 $1.30      30              $1.40        30

Butter (kg)           $2.00       3               $2.75         2

Eggs (dozen)       $1.60       8               $2.00         4

Sugar (kg)            $1.70      14             $2.40        10

a) Compute the Laspeyres price index, using 2002 as the base year. My Answer for a) P= ΣPnQ0/ΣP0Q0(100) 99.65/81.60(100) = 122.13

b) Assume that your index, calculated in (a), applied in general for all foods. Suppose a certain family spent $1500 in 2002 and $2500 in 2012. In which of the two years would the family have had more to eat for their money? Show your rational. (No idea how to answer b)

 

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