HW chap 6-2

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Unformatted text preview: = $29.00. 5 ounces of sunscreen and 20 gallons of lemonade is the base bundle, where the Laspeyres index equals 1.000. The cost of June's bundle in July is: (1.10)5 + (1.70)20 = $39.50. This is a difference (from June to July) of 39.50 – 29.00 = $10.50, or 10.50 / 29.00 = 36.207 percent, so the Laspeyres index for July is 1.362. The cost of June's bundle in August is: (1.40)5 + (1.80)20 = $43.00. This is a difference (from July to August) of 43.00 – 39.50 = $3.50, or 3.50 / 39.50 = 8.861 percent, so...
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