6. The typical consumers food basket in the base year 2015 is as follows: A chicken feed...

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6. The typical consumer’s food basket in the base year 2015 is as follows: A chicken feed shortage causes the price of chickens to rise to $5.00 each in the year 2016. Hams rise to $7.00 each, and the price of steaks is unchanged. LO 3.1 LO 3.3 MEDIUM 30 chickens at $3.00 each 10 hams at $6.00 each 10 steaks at $8.00 each. a)Calculate the change in the ‘cost-of-eating’ index between 2015 and 2016. b)Suppose that consumers are completely indifferent between two chickens and one ham. For this example, how large is the substitution bias in the official ‘cost-of-eating’ index?

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