CA Foundation · Quantitative Aptitude · Index Numbers
For a group of items, Σp0q0 = 200, Σp1q0 = 260, Σp0q1 = 250 and Σp1q1 = 340. What is the Marshall-Edgeworth price index number?
The Marshall-Edgeworth index is 133.3. It is calculated as (260 + 340) divided by (200 + 250), times 100, which is 600/450 × 100. The values 130 and 136 are the Laspeyres and Paasche indices, which use only one set of quantities.
- A130
- B136
- C133.3Correct
- D120
Explanation
Marshall-Edgeworth = (Σp1q0 + Σp1q1) / (Σp0q0 + Σp0q1) × 100 = (260 + 340)/(200 + 250) × 100 = 600/450 × 100 = 133.3. The value 130 is just the Laspeyres index and 136 is the Paasche index.
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