Suppose the typical consumer only purchases food and clothing,and her utility can be expressed as
U = F ∗ C.Currently,food costs $5 per unit and clothing costs $2 per unit.Her income is $70.If the price of food increases to $6,compare the resulting Laspeyres price index with a true cost of living index.

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The Answer of Suppose the typical consumer only purchases food and clothing,and her utility can be expressed as
U = F ∗ C.Currently,food costs $5 per unit and clothing costs $2 per unit.Her income is $70.If the price of food increases to $6,compare the resulting Laspeyres price index with a true cost of living index.

Suppose the Typical Consumer Only Purchases Food and Clothing,and Her