20 Jul WHAT IS THE BEST YEAR IN TERMS OF REAL INCOME FOR THIS FARMER?
The output produced and the price of this out put ($/bushel) for a farmer over the last three years Show more The output produced and the price of this out put ($/bushel) for a farmer over the last three years are as follows: year output price consumer price index production expenses 2001 70.000 $3.20 1.10 $120000 2002 75000 $ 2.90 1.20 $ 140000 2003 80000 $ 2.80 1.15 $ 135000 Let the base year be 2002: a. For the year 2001 what is the output index? Interpret this measure. b. For the year 2003 what is the output index? Interpret this measure. c. Assume that the only sources of income for this farmer is from the production of this output. What is the best year in terms of real income for this farmer? Show less
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