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Question
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 |
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Solution
| Commodity | Base Year | Current Year | p0q0 | p1q0 | p0q1 | p1q1 | ||
| p0 | q0 | p1 | q1 | |||||
| A | 20 | 18 | 30 | 15 | 360 | 540 | 300 | 450 |
| B | 25 | 8 | 28 | 5 | 200 | 224 | 125 | 140 |
| C | 32 | 5 | 40 | 7 | 160 | 200 | 224 | 280 |
| D | 12 | 10 | 18 | 10 | 120 | 180 | 120 | 180 |
| Total | – | – | – | – | 840 | 1144 | 769 | 1050 |
From the table,
`sum"p"_0"q"_0 = 840, sum"p"_1"q"_0 = 1144`,
`sum"p"_0"q"_1 = 769, sum"p"_1"q"_1 = 1050`
Laspeyre's Price Index Number:
P01(L) = `(sum"p"_1"q"_0)/(sum"p"_0"q"_0) xx 100`
= `(1144)/(840) xx 100`
= 136.19
Paasche's Price Index Number:
P01(P) = `(sum"p"_1"q"_1)/(sum"p"_0"q"_1) xx 100`
= `(1050)/(769) xx 100`
= 136.54
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RELATED QUESTIONS
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| Commodity | Base Year | Current Year | ||
| Price p0 |
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|
| I | 8 | 30 | 11 | 28 |
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| Commodity | Base Year | Current Year | ||
| Price p0 |
Quantity q0 |
Price p1 |
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|
| A | 3 | x | 2 | 5 |
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Solve the following problem :
Find x if Paasche’s Price Index Number is 140 for the following data.
| Commodity | Base Year | Current Year | ||
| Price p0 |
Quantity q0 |
Price p1 |
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|
| A | 20 | 8 | 40 | 7 |
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| C | 40 | 15 | 60 | x |
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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.
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If `sum"p_"0"q"_0 = 120, sum "p"_0"q"_1 = 160, sum "p"_1"q"_1 = 140, and sum "p"_1"q"+0` = 200, find Laspeyre’s, Paasche’s Dorbish-Bowley’s and Marshall Edgeworth’s Price Index Number.
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| Commodity | Base Year | Current Year | ||
| Price | Quantity | Price | Quantity | |
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If `sum"p"_0"q"_0` = 150, `sum"p"_0"q"_1` = 250, `sum"p"_1"q"_1` = 375 and P01(L) = 140. Find P01(M-E)
Complete the following activity to 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 |
|
| I | 8 | 30 | 12 | 25 |
| II | 10 | 42 | 20 | 16 |
Solution:
| Commodity | Base Year | Current Year | p1q0 | p0q0 | p1q1 | p0q1 | ||
| p0 | q0 | p1 | q1 | |||||
| I | 8 | 30 | 12 | 25 | 360 | 240 | 300 | 200 |
| II | 10 | 42 | 20 | 16 | 840 | 420 | 320 | 160 |
| Total | `bb(sump_1q_0=1200)` | `bb(sump_0q_0=660)` | `bb(sump_1q_1=620)` | `bb(sump_0q_1=360)` | ||||
Laspeyre's Price Index Number:
P01(L) = `(sum"p"_1"q"_0)/(sum"p"_0"q"_0) xx 100 = square/660xx100`
∴ P01(L) = `square`
Paasche 's Price Index Number:
P01(P) = `(sum"p"_1"q"_1)/(sum"p"_0"q"_1) xx 100=(620)/(square) xx 100`
∴ P01(P) = `square`
