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Question
Calculate Laspeyre’s, Paasche’s, Dorbish-Bowley’s, and MarshallEdgeworth’s Price index numbers.
| Commodity | Base Year | Current Year | ||
| Price | Quantity | Price | Quantity | |
| A | 8 | 20 | 11 | 15 |
| B | 7 | 10 | 12 | 10 |
| C | 3 | 30 | 5 | 25 |
| D | 2 | 50 | 4 | 35 |
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Solution
| Commodity | Base Year | Current Year | p0q0 | p1q0 | p0q1 | p1q1 | ||
| p0 | q0 | p1 | q1 | |||||
| A | 8 | 20 | 11 | 15 | 160 | 220 | 120 | 165 |
| B | 7 | 10 | 12 | 10 | 70 | 120 | 70 | 120 |
| C | 3 | 30 | 5 | 25 | 90 | 150 | 75 | 125 |
| D | 2 | 50 | 4 | 35 | 100 | 200 | 70 | 140 |
| Total | - | - | - | - | 420 | 690 | 335 | 550 |
From the table,
`sum "p"_0"q"_0 = 420, sum "p"_1"q"_0 = 690`
`sum "p"_0"q"_1 = 335, sum "p"_1"q"_1 = 550`
(i) Laspeyre’s Price Index Number:
`"P"_01 ("L") = (sum "p"_1"q"_0)/(sum "p"_0"q"_0) xx 100 = 690/420 xx 100 = 164.29`
(ii) Paasche’s Price Index Number:
`"P"_01 ("P") = (sum "p"_1"q"_1)/(sum "p"_0"q"_1) xx 100 = 550/335 xx 100 = 164.18`
(iii) Dorbish-Bowley’s Price Index Number:
`"P"_01 ("D - B") = ("P"_01 ("L") + "P"_01 ("P"))/2`
`= (164.29 + 164.18)/2`
= 164.24
(iv) Marshall-Edgeworth’s Price Index Number:
`"P"_01 ("M- E") = (sum "p"_1"q"_0 + sum "p"_1"q"_1)/(sum "p"_0"q"_0 + sum "p"_0"q"_1) xx 100`
`= (690 + 550)/(420 + 335) xx 100`
`= 1240/755 xx 100`
= 164.24
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RELATED QUESTIONS
Calculate Laspeyre’s, Paasche’s, Dorbish-Bowley’s, and Marshall - Edgeworth’s Price index numbers.
| Commodity | Base Year | Current Year | ||
| Price | Quantity | Price | Quantity | |
| I | 10 | 9 | 20 | 8 |
| II | 20 | 5 | 30 | 4 |
| III | 30 | 7 | 50 | 5 |
| IV | 40 | 8 | 60 | 6 |
Calculate Walsh’s Price Index Number.
| Commodity | Base Year | Current Year | ||
| Price | Quantity | Price | Quantity | |
| I | 10 | 12 | 20 | 9 |
| II | 20 | 4 | 25 | 8 |
| III | 30 | 13 | 40 | 27 |
| IV | 60 | 29 | 75 | 36 |
If P01(L) = 90 and P01(P) = 40, find P01(D – B) and P01(F).
Find x in the following table if Laspeyre’s and Paasche’s Price Index Numbers are equal.
| Commodity | Base Year | Current year | ||
| Price | Quantity | Price | Quantity | |
| A | 2 | 10 | 2 | 5 |
| B | 2 | 5 | x | 2 |
Choose the correct alternative :
The price Index Number by Weighted Aggregate Method is given by ______.
Dorbish-Bowley’s Price Index Number is given by ______.
Choose the correct alternative :
Marshall-Edgeworth’s Price Index Number is given by
Fill in the blank :
Paasche’s Price Index Number is given by _______.
Fill in the blank :
Dorbish-Bowley’s Price Index Number is given by _______.
Walsh’s Price Index Number is given by _______.
State whether the following is True or False :
`sqrt(("p"_1"q"_0)/(sum"p"_0"q"_0)) xx sqrt((sum"p"_1"q"_1)/(sum"p"_0"q"_1)) xx 100` is Fisher’s Price Index Number.
Solve the following problem :
Calculate Laspeyre’s and Paasche’s Price Index Number for the following data.
| Commodity | Base year | Current year | ||
| Price p0 |
Quantity q0 |
price p1 |
Quantity q1 |
|
| A | 20 | 18 | 30 | 15 |
| B | 25 | 8 | 28 | 5 |
| C | 32 | 5 | 40 | 7 |
| D | 12 | 10 | 18 | 10 |
Solve the following problem :
Calculate Dorbish-Bowley’s Price Index Number for the following data.
| Commodity | Base Year | Current Year | ||
| Price p0 |
Quantity q0 |
Price p1 |
Quantity q1 |
|
| I | 8 | 30 | 11 | 28 |
| II | 9 | 25 | 12 | 22 |
| III | 10 | 15 | 13 | 11 |
Solve the following problem :
Calculate Marshall-Edgeworth’s Price Index Number for the following data.
| Commodity | Base Year | Current Year | ||
| Price p0 |
Quantity q0 |
Price p1 |
Quantity q1 |
|
| X | 12 | 35 | 15 | 25 |
| Y | 29 | 50 | 30 | 70 |
Solve the following problem :
Given that Laspeyre’s and Paasche’s Price Index Numbers are 25 and 16 respectively, find Dorbish-Bowley’s and Fisher’s Price Index Number.
Choose the correct alternative:
Price Index Number by using Weighted Aggregate Method is given by
Choose the correct alternative:
Walsh's Price Index Number is given by
Choose the correct alternative:
Fisher’s Price Index Number is
Fisher's Price Index Number is given by ______.
Marshall-Edgeworth's Price Index Number is given by ______
The average of Laspeyre’s and Paasche’s Price Index Numbers is called ______ Price Index Number
Calculate
a) Laspeyre’s
b) Passche’s
c) Dorbish-Bowley’s Price Index Numbers for following data.
| Commodity | Base Year | Current Year | ||
| Price | Quantity | Price | Quantity | |
| A | 10 | 9 | 50 | 8 |
| B | 20 | 5 | 60 | 4 |
| C | 30 | 7 | 70 | 3 |
| D | 40 | 8 | 80 | 2 |
If P01(L) = 40 and P01(P) = 90, find P01(D-B) and P01(F).
Laspeyre’s Price Index Number uses current year’s quantities as weights.
