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Laspeyres and paashe cost-of-living indexes

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Reference no: EM131227198

The utility that Mary receives by consuming food F and clothing C is given by U(F,C)*F*C. Suppose that Mary's income in 2000 is 200$ and the prices of food is 1$ and price of clothing is 2$ per unit for each. However, by 2015 the price of food has increased to 2$ and the price of clothing to 16$. Calculate ideal, Laspeyres and Paashe cost-of-living indexes for Mary for 2015.

Reference no: EM131227198

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