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Question
Find the Price Index Number using Simple Aggregate Method in the following example.
Use 1995 as base year in the following problem.
| Commodity | A | B | C | D | E |
| Price (in ₹) in 1995 | 42 | 30 | 54 | 70 | 120 |
| Price (in ₹) in 2005 | 60 | 55 | 74 | 110 | 140 |
Solution
| Commodity | Price in 1995 (Base year) p0 |
Price in 2005 (Current year)p1 |
| A | 42 | 60 |
| B | 30 | 55 |
| C | 54 | 74 |
| D | 70 | 110 |
| E | 120 | 140 |
| Total | 316 | 439 |
From the table, ∑ p0 = 316, ∑ p1 = 439
Price Index Number (P01) = `(sum "p"_1)/(sum "p"_0) xx 100`
`= 439/316 xx 100`
= 138.92
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RELATED QUESTIONS
Laaspeyre's index : _________ :: Paasche's index : Current year quantities
Calculate the price index number from the given data:
| Commodity | A | B | C | D |
| Price in 2005 (₹) | 6 | 16 | 24 | 4 |
| Price in 2010 (₹) | 8 | 18 | 28 | 6 |
Solve the following:
Calculate Quantity Index number from the given data:
| Commodity | P | Q | R | S | T |
| Base year quantities | 170 | 150 | 100 | 195 | 205 |
| Current year quantities | 90 | 70 | 75 | 150 | 95 |
Solve the following:
Calculate Paasche's index from the given data:
| Commodity | Base year | current year | ||
| Price | Quantity | Price | Quantity | |
| X | 8 | 30 | 12 | 25 |
| Y | 10 | 42 | 20 | 16 |
Distinguish between Laaspeyre's Index and Paasche's Index.
Explain the steps involved in the construction of index numbers.
Find the Price Index Number using Simple Aggregate Method in the following example.
Use 1995 as base year in the following problem.
| Commodity | P | Q | R | S | T |
| Price (in ₹) in 1995 | 15 | 20 | 24 | 23 | 28 |
| Price (in ₹) in 2000 | 27 | 38 | 32 | 40 | 45 |
Find the Price Index Number using Simple Aggregate Method in the following example.
| Commodity | Unit | Base Year Price (in ₹) | Current Year Price (in ₹) |
| Wheat | kg | 28 | 36 |
| Rice | kg | 40 | 56 |
| Milk | litre | 35 | 45 |
| Clothing | meter | 82 | 104 |
| Fuel | litre | 58 | 72 |
Find the Price Index Number using the Simple Aggregate Method in the following example.
Use 2000 as base year in the following problem.
| Commodity | Price (in ₹) for year 2000 |
Price (in ₹) for year 2006 |
| Watch | 900 | 1475 |
| Shoes | 1760 | 2300 |
| Sunglasses | 600 | 1040 |
| Mobile | 4500 | 8500 |
Find the Price Index Number using the Simple Aggregate Method in the following example.
Use 1990 as base year in the following problem.
| Commodity | Unit | Price (in ₹) for year 2000 |
Price (in ₹) for year 2006 |
| Butter | kg | 27 | 33 |
| Cheese | kg | 30 | 36 |
| Milk | litre | 25 | 29 |
| Bread | loaf | 10 | 14 |
| Eggs | doz | 24 | 36 |
| Ghee | tin | 250 | 320 |
Find the Quantity Index Number using the Simple Aggregate Method in the following example.
| Commodity | I | II | III | IV | V |
| Base Year Quantities | 140 | 120 | 100 | 200 | 225 |
| Current Year Quantities | 100 | 80 | 70 | 150 | 185 |
Find the Quantity Index Number using the Simple Aggregate Method in the following example.
| Commodity | A | B | C | D | E |
| Base Year Quantities | 360 | 280 | 340 | 160 | 260 |
| Current Year Quantities | 440 | 320 | 470 | 210 | 300 |
Find the Value Index Number using Simple Aggregate Method in the following example.
| Commodity | Base Year | Current Year | ||
| Price | Quantity | Price | Quantity | |
| A | 30 | 22 | 40 | 18 |
| B | 40 | 16 | 60 | 12 |
| C | 10 | 38 | 15 | 24 |
| D | 50 | 12 | 60 | 16 |
| E | 20 | 28 | 25 | 36 |
Assertion (A): Generally, arithmetic mean is used in the construction of index numbers.
Reasoning (R): Arithmetic mean is simple to compute compared to other averages.
State with reasons whether you agree or disagree with the following statement:
It is not essential to decide the purpose of an index number while constructing it.
Explain the steps in constructing a price index number.
