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A consumer purchased 10 units of good X and 6 units of good Y in year 1? (the base? period) when the price of good X was? $8 and the price of good Y was? $5. The next year? (year 2) the price of X fell to? $7 and the price of Y increased to? $8.
a. Set the Laspeyres price index in year 1 equal to 100. Then the Laspeyres price index in year 2 is________. ?(Enter your response as a real number rounded to one decimal? place.)
b. Based on the Laspeyres price? index, inflation between year 1 and year 2 was______ percent. ?(Enter your response as a real number rounded to one decimal? place.)
c. The consumer says that if she could afford to purchase 11 units of X and 4.5 units of Y at the prices in year? 2, she would be just as well off as she was in year 1. Based on this? information, the ideal? cost-of-living index for this consumer is _________. ?(Enter your response as a real number rounded to one
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