CA Foundation · Quantitative Aptitude · Index Numbers
For two commodities, the data are: A: p0 = 10, q0 = 5, p1 = 12, q1 = 6; B: p0 = 20, q0 = 10, p1 = 25, q1 = 8. What is the Laspeyres price index number?
The Laspeyres price index is 124. The base year basket costs ₹250 at base prices and ₹310 at current prices, so the ratio is 310/250 multiplied by 100, which equals 124.
- A120.00
- B123.20
- C124.00Correct
- D125.00
Explanation
Σp1q0 = 12×5 + 25×10 = 60 + 250 = 310. Σp0q0 = 10×5 + 20×10 = 50 + 200 = 250. Laspeyres = 310/250 × 100 = 124. Using current quantities, 12×6+25×8=272 over 10×6+20×8=220 gives 123.64, the Paasche value, which is a different index.
Did you get it right without looking?
One question tells you little. A timed set on Index Numbers shows your real accuracy, how long you take and where you lose marks.
More Index Numbers questions
- A person's money income rose from ₹30,000 in 2018 (base year) to ₹48,000 in 2024. The consumer price index for 2024 is 160 with 2018 = 100. …
- Which one of the following statements about the Laspeyres price index is correct?
- A CPI series (base 2015 = 100) shows 200 for 2023. A family's income was ₹30,000 in 2015 and is ₹54,000 in 2023. By what percentage has the …
- In constructing a cost of living index number by the aggregate expenditure (Laspeyres) method, the weights used for the commodities are:
- Which statement about the Consumer Price Index (cost of living index) is correct?
- In constructing a cost of living index by the weighted average of price relatives method, three items have price relatives 120, 150 and 110 …