CA Foundation P3 · Chapter 18 · Question 2 of 9
Using 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 = 10, q₁ = 8 Item C: p₀ = 5, q₀ = 8, p₁ = 6, q₁ = 10
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 122.35
Explanation
Laspeyres uses base-year quantities: Σp₁q₀ = 60 + 100 + 48 = 208 and Σp₀q₀ = 50 + 80 + 40 = 170. Index = (208/170) x 100 = 122.35. 121.84 is the Paasche index and 81.73 is the inverted ratio (170/208 x 100).
More Index Numbers MCQs
- 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…
- Q7On an old base, the index numbers for years X and Y are 150 and 180. If the base is shifted to year X, the new index for year Y is:
- Q8A worker's money wage is ₹30,000 per month and the consumer price index (base = 100) is 150. His real wage in base-year prices is: