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

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Suppose the typical consumer only purchases food and clothing, and her utility can be expressed as Suppose the typical consumer only purchases food and clothing, and her utility can be expressed as . 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. . 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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