y. "The economy produces three goods: Cell Phones, Computers and Cars. In thiseconomy, cell phone and computer prices have been falling over time, while car prices haveincreased over time. The prices and quantities of these goods, in two different years (year 1and year 2), are given below12Quantity of Cell PhonesQuantity of ComputersQuantity of CarsPrice of Cell Phones (8) 100Price of Computers (8) 1000 600Price of Cars (8)100150501001012805000 8000a Use a Laspeyres index to determine how much prices have changed from year 1 toyear 2. Show your working.(Hint: You will first construct real DP growth using Laspeyres index)b. Use Paasche index to determine how much prices have changed from year 1 to year 2.Show your working.(Hint: You will first construct real GDP growth using Paasche index)

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The economy produces three goods: Cell Phones, Computers and Cars. In this economy, cell phone and computer prices have been falling over time, while car prices have increased over time. The prices and quantities of these goods, in two different years (year 1 and year 2), are given below 1 2 Quantity of Cell Phones 100 Quantity of Computers Quantity of Cars Price of Cell Phones (8) 100 Price of Computers (8) Price of Cars (8) 150 50 100 10 12 80 1000 600 5000 8000 a Use a Laspeyres index to determine how much prices have changed from year 1 to year 2. Show your working. (Hint: You will first construct real aDP growth using Laspeyres index) b. Use Paasche index to determine how much prices have changed from year 1 to year 2. Show your working. (Hint: You will first construct real GDP growth using Paasche index)

The economy produces three goods: Cell Phones, Computers and Cars. In this economy, cell phone and computer prices have been falling over time, while car prices have increased over time. The prices and quantities of these goods, in two different years (year 1 and year 2), are given below 1 2 Quantity of Cell Phones 100 Quantity of Computers Quantity of Cars Price of Cell Phones (8) 100 Price of Computers (8) Price of Cars (8) 150 50 100 10 12 80 1000 600 5000 8000 a Use a Laspeyres index to determine how much prices have changed from year 1 to year 2. Show your working. (Hint: You will first construct real aDP growth using Laspeyres index) b. Use Paasche index to determine how much prices have changed from year 1 to year 2. Show your working. (Hint: You will first construct real GDP growth using Paasche index)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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