Ruth is a senior citizen who consumes food and health care. When she retired in 2002, she consumed 90 meals and 3 medical checkups per month. Suppose in 2002 that the price of a meal was $10 and the price of a medical checkup was $57. However, in 2012, the price of a meal is $11 and the price of a medical checkup is $306. As a result, Ruth consumes 100 meals and 2 medical checkups per month. Calculate a Laspeyres cost-of-living index for Ruth using 100 as the base in 2002. In particular, the Laspeyres index for 2012 is nothing. (Enter your response rounded to two decimal places.)
Laspeyres Price Index in Year 2012 = Price of individual item in the observation period * Quantity of Individual item in base period / Price of individual item in base period * Quantity of individual item in base period * 100
Laspeyres Price Index = 11*90 + 306*3 / 10*90 + 57*3 *100
= 990 + 918 / 900 + 171 *100
= 1908 / 1071 * 100
= 1.782 * 100
= 178.2
Ruth is a senior citizen who consumes food and health care. When she retired in 2002,...
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