CA Foundation P3 · Chapter 18 · Question 9 of 9
The price relatives of three items are 120, 150 and 110, with weights 5, 2 and 3 respectively. The weighted index of price relatives is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 123
Explanation
Weighted index = ΣwP/Σw = (5 x 120 + 2 x 150 + 3 x 110)/(5 + 2 + 3) = (600 + 300 + 330)/10 = 1,230/10 = 123. The simple average (380/3) is 126.67.
More Index Numbers MCQs
- Q2Using the data below, Laspeyres' price index is (to two decimals): Item A: p₀ = 10, q₀ = 5, p₁ = 12, q₁ = 6 Item B: p₀ = 8, q₀ = 10, p₁ =…
- Q3Using the data below, Paasche's price index is (to two decimals): Item A: p₀ = 10, q₀ = 5, p₁ = 12, q₁ = 6 Item B: p₀ = 8, q₀ = 10, p₁ =…
- Q4Laspeyres' price index is 125 and Paasche's price index is 120. Fisher's ideal index is (to two decimals):
- Q5Which index number satisfies both the time reversal test and the factor reversal test?
- Q6The link relatives of prices for three successive years (each on the previous year as 100) are 110, 105 and 120. Taking the year before…