Index

Numerical
Q 5.20 : Calculate The Price relatives for each year from the following avera
(i) 1995 as a base (ii) 1998 as a base
Retail Price Price Relatives
year (RS)
(i) 1995 as a base (ii) 1998 as a base
1995 Rs 14.95 100 95.5271565495208
1996 Rs 14.94 99.933110367893 95.4632587859425
1997 Rs 15.10 101.003344481605 96.4856230031949
1998 Rs 15.65 104.682274247492 100
1999 Rs 16.28 108.896321070234 104.025559105431
2000 Rs 16.53 110.56856187291 105.623003194888
Q 5.21 : Calculate the Price relatives of the production of cotton cloth (in million mete
base year, (ii) average of 1958,59,60 as base period.
Price Relatives
Year Production
(i) 1954 as a base (ii) avg of 1958,59,&60
1954 282 m 100 51.90184049079
1955 389 m 137.943262411348 71.59509202453
1956 438 m 155.31914893617 80.61349693251
1957 470 m 166.666666666667 86.50306748466
1958 511 m 181.205673758865 94.04907975460
 1959 555 m 196.808510638298 102.1472392638
1960 564 m 200 103.8036809815
1961 630 m 223.404255319149 115.9509202453
1962 662 m 234.751773049645 121.8404907975
1963 681 m 241.489361702128 125.3374233128
Q 5.22 : Calculate the simple aggregative price indices and the simple average of relta
Wheat, & Cotton for the years 2002 to 2006. Where 2001 as a base.

Average prices in Rs. Per unit

Commodity
2001 2002 2003 2004 2005
Gold Rs 25.30 Rs 30.80 Rs 33.40 Rs 35.50 Rs 35.30

Wheat Rs 17.30 Rs 14.50 Rs 4.90 Rs 5.70 Rs 17.10

Cotton Rs 7.80 Rs 5.40 Rs 6.70 Rs 5.60 Rs 7.20

Total 50.4 50.7 45.00 46.80 59.60
Price Relatives
Year
Gold Wheat Cotton
2001 Rs 100.00 Rs 100.00 Rs 100.00
2002 Rs 121.74 Rs 83.82 Rs 69.23
2003 Rs 132.02 Rs 28.32 Rs 85.90
2004 Rs 140.32 Rs 32.95 Rs 71.79
2005 Rs 139.53 Rs 98.84 Rs 92.31
2006 Rs 142.29 Rs 67.05 Rs 130.77
Q 5.23 : Calculate the price index numbers of Wheat, Barley, Jawar & Bajra from Apri
May 2001 as a base period by following methods (i) Simple aggregative method,(ii) Si
relatives & (iii) Geometric mean of price relatives.
May April
Commodites
2001 P° 2002 P¹
Wheat 17.50 18.37

Barley 14.58 14.58

 Jawar 14.67 13.94

Bajra 17.50 13.75

∑ 64.25 60.64

(i) Simple Aggregative Method

P.R=∑Pn/∑P0X100

For April
94.3813229571985
2002 P¹
For May
97.6653696498054
2002 P²

(ii) Simple Average(mean)

Price relatives Method
Price Relatives
Year
Wheat Barley Jawar
May
2001 100 100 100

April
2002 104.971428571429 100 95.0238582140423

May
2002 100.457142857143 113.168724279835 103.953646898432

(iii) Geometric Mean of

Price Relatives
Price Relatives
Year
Wheat Barley Jawar
May
2001 100 100 100
May
2001 100 100 100

April
104.971428571429 100 95.0238582140423
2002

May
100.457142857143 113.168724279835 103.953646898432
2002
 Chapter 5
Index Numbers
merical Part Solution
om the following average retail prices of wheat, using

ves
(ii) 1998 as a base
95.5271565495208
95.4632587859425
96.4856230031949
100
104.025559105431
105.623003194888
tton cloth (in million meters) for pakistan from 1954 to 1963 where (i) 1954 as a

e Relatives
(ii) avg of 1958,59,&60 as a base Average of 1958,59,60 = 543.33
51.9018404907976
71.5950920245399
80.6134969325153
86.5030674846626
94.0490797546012
 102.147239263804
103.803680981595
115.950920245399
121.840490797546
125.337423312883
he simple average of reltaives price indices of the Gold,
s a base.

Rs. Per unit

2006
Rs 36.00

Rs 11.60

Rs 10.20
57.80
Index No.
Sum of price
Relatives as average
of Relatives
300.00 100.00
274.78 91.59
246.24 82.08
245.06 81.69
330.68 110.23
340.11 113.37
, Jawar & Bajra from April 2002 to May 2002 where
aggregative method,(ii) Simple Average(mean) of price

May
2002 P²
17.58

16.50
 15.25

13.25

62.75

s
Index No.as
Jawar Bajra Sum of Average of
Price Relative Relatives
100 100 400 100

5.0238582140423 78.571428571 378.56671536 94.6416788392249

03.953646898432 75.714285714 393.29379975 98.323449937424

s
Indices
Jawar Bajra Geometric
Mean
100 100 100
 100 100 100

5.0238582140423 78.571428571 94.089704429

03.953646898432 75.714285714 97.259313641

on
Q 5.24 : Calculate the index numbers from the following table By Chain base method
relative
for 1928 to 1931 and also construct Chain indices.
Average Prices in Rs. Per 40 Kg
Commodities
1928 1929 1930 1931

Rice Rs 7.30 Rs 7.70 Rs 5.80 Rs 4.10

Wheat Rs 7.50 Rs 5.50 Rs 3.60 Rs 2.70

Linseed Rs 7.00 Rs 8.00 Rs 6.50 Rs 4.20

Gur Rs 6.30 Rs 7.30 Rs 6.20 Rs 4.20

Cotton Rs 34.10 Rs 29.80 Rs 17.30 Rs 13.30

Tobacco Rs 17.30 Rs 17.10 Rs 14.50 Rs 11.60

Link Relatives
Year
Rice Wheat Linseed Gur

1928 Rs 100.00 Rs 100.00 Rs 100.00 Rs 100.00

1929 Rs 105.48 Rs 73.33 Rs 114.29 Rs 115.87

1930 Rs 75.32 Rs 65.45 Rs 81.25 Rs 84.93

1931 Rs 70.69 Rs 75.00 Rs 64.62 Rs 67.74

Q 5.25 : Construct the Chain Indices for the following data for Price Relatives for 1941

Year Sugar Gur Tea Coffee

1941 Rs 98.00 Rs 75.00 Rs 82.00 Rs 99.00

1942 Rs 100.00 Rs 82.00 Rs 74.00 Rs 100.00

1943 Rs 114.00 Rs 83.00 Rs 78.00 Rs 104.00

1944 Rs 109.00 Rs 84.00 Rs 89.00 Rs 95.00

 1944 Rs 109.00 Rs 84.00 Rs 89.00 Rs 95.00
Link Relatives
Year
Sugar Gur Tea Coffee

1941 Rs 98.00 Rs 75.00 Rs 82.00 Rs 99.00

1942 Rs 102.04 Rs 109.33 Rs 90.24 Rs 101.01

1943 Rs 114.00 Rs 101.22 Rs 105.41 Rs 104.00

1944 Rs 95.61 Rs 101.20 Rs 114.10 Rs 91.35

Q 5.26 : The price relatives of three commodities are given below (a) compute price r
(b) Chain indices where 2001 is base.
Price Relatives of Commodities
Year
A B C

2001 Rs 100.00 Rs 100.00 Rs 100.00

2002 Rs 105.00 Rs 97.00 Rs 121.00

2003 Rs 110.00 Rs 94.00 Rs 125.00

2004 Rs 115.00 Rs 100.00 Rs 130.00

2005 Rs 116.00 Rs 99.00 Rs 128.00

2006 Rs 120.00 Rs 105.00 Rs 130.00

Price Relatives of Commodities Total
Year Link Relatives
A B C

2001 Rs 100.00 Rs 100.00 Rs 100.00 300.00

2002 Rs 105.00 Rs 97.00 Rs 121.00 323.00

2003 Rs 104.76 Rs 96.91 Rs 103.31 304.97

2004 Rs 104.55 Rs 106.38 Rs 104.00 314.93

 2004 Rs 104.55 Rs 106.38 Rs 104.00 314.93

2005 Rs 100.87 Rs 99.00 Rs 98.46 298.33

2006 Rs 103.45 Rs 106.06 Rs 101.56 311.07

Q 5.27 : The Price relatives of four commodities for the years 2002-2005 inclusive, Th
being start from 2001.
Calculate : (i) An index number for each year, 2002-2005, using the simple A.M of Pric
(ii) index number for each year, using the chain base method.

Price Relatives : 2001=100

Commodities
2001 2002 2003 2004

A Rs 100.00 Rs 125.00 Rs 112.00 Rs 125.00

B Rs 100.00 Rs 120.00 Rs 110.00 Rs 120.00

C Rs 100.00 Rs 87.00 Rs 92.00 Rs 108.00

D Rs 100.00 Rs 75.00 Rs 125.00 Rs 150.00

(i) An index number for each year, 2002-2005, using the simple A.M of Price relatives
Price Relatives of Commodities

Year A B C D

2001 Rs 100.00 Rs 100.00 Rs 100.00 Rs 100.00

2002 Rs 125.00 Rs 120.00 Rs 87.00 Rs 75.00

2003 Rs 112.00 Rs 110.00 Rs 92.00 Rs 125.00

2004 Rs 125.00 Rs 120.00 Rs 108.00 Rs 150.00

2005 Rs 131.00 Rs 127.00 Rs 122.00 Rs 140.00

(ii) index number for each year, using the chain base method.
Link Relatives of
Commodities
Year
A B C D
Year
A B C D

2001 Rs 100.00 Rs 100.00 Rs 100.00 Rs 100.00

2002 Rs 125.00 Rs 120.00 Rs 87.00 Rs 75.00

2003 Rs 89.60 Rs 91.67 Rs 105.75 Rs 166.67

2004 Rs 111.61 Rs 109.09 Rs 117.39 Rs 120.00

2005 Rs 104.80 Rs 105.83 Rs 112.96 Rs 93.33

Chain base method for Price

Total Chain
Link Relatives Average Indices
Cotton Tobacco

Rs 100.00 Rs 100.00 600.00 100.00 100.00

Rs 87.39 Rs 98.84 595.21 99.20 99.20

Rs 58.05 Rs 84.80 449.81 74.97 74.37

Rs 76.88 Rs 80.00 434.93 72.49 53.91

ce Relatives for 1941 to 1944.

 Total Average Chain
Link Relatives Indices

354.00 88.50 88.50

402.63 100.66 89.08

424.62 106.16 94.57

402.27 100.57 95.10

w (a) compute price relatives

(A) (B)
Average Chain Indices

100.00 100.00

107.67 107.67

101.66 109.45

104.98 114.90
 104.98 114.90

99.44 114.26

103.69 118.48

02-2005 inclusive, The Price of each commodity in 2001

he simple A.M of Price relatives.

2005

Rs 131.00

Rs 127.00

Rs 122.00

Rs 140.00
A.M of Price relatives.
Total index No.
Link Relatives as Mean

400.00 100.00

407.00 101.75

439.00 109.75

503.00 125.75

520.00 130.00

Total Average Chain

Link Relatives Indices
 Total Average Chain
Link Relatives Indices

400.00 100.00 100.00

407.00 101.75 101.75

453.68 113.42 115.40

458.09 114.52 132.16

416.93 104.23 137.76

Q 5.28 : A firm its material into four main groups and tries to estimate the overall effe
by
Producing an index number weighted according to the Tonnages used in 2003. Calcul
2007
from the following information.
2003 2007
Groups
Tons Price (£) Tons Price (£)

A 50 £ 85.00 45 £ 116.00

B 120 £ 34.00 185 £ 42.00

C 35 £ 10.00 68 £ 15.00

D 210 £ 48.00 250 £ 50.00

Base Year Current Year
Groups
P° q° P¹ q¹
A £ 85.00 50 £ 116.00 45

B £ 34.00 120 £ 42.00 185

C £ 10.00 35 £ 15.00 68

D £ 48.00 210 £ 50.00 250

Total --- --- --- ---

P°¹ = ∑P¹q°/∑P°q°x100 = 116.551
Q 5.29 : The Prices and Quantities of three Commodities are shown below :
(a) using 1998 as the base period and the base period Quantites as weights, compute
Price index and the Weighted average of relatives Price index for 2005.
(b) Using 1998 as the base period and 2005 Quantities as weights, compute the Weig
Weighted Average of relatives Prices index for 2005.
Price (Rs.) Quantity
Commodity
1998 2005 1998 2005

Rice Rs 3.50 Rs 3.15 71 80

 Rice Rs 3.50 Rs 3.15 71 80

Barley Rs 2.00 Rs 1.80 107 138

Maize Rs 2.60 Rs 1.75 62 57

(a) using 1998 as the base period and the base period Quantites as weights, compute
Aggregative
Price index and the Weighted Average of relatives Price index for 2005.
Base Year Current Year
Commodity
P° q°
P¹ q¹
Rice Rs 3.50 71 Rs 3.15 80

Barley Rs 2.00 107 Rs 1.80 138

Maize Rs 2.60 62 Rs 1.75 57

Total --- --- --- ---

Weighted-Aggregative Price index P°¹ = ∑P¹q°/∑P°q°x100
Weighted Average of Relatives Price index = ∑(P°q°)*P¹/P°/∑P
(b) Using 1998 as the base period and 2005 Quantities as weights, compute the Weig
and the
Weighted Average of relatives Prices index for 2005.
Base Year Current Year
Commodity
P° q° P¹ q¹
Rice Rs 3.50 71 Rs 3.15 80

Barley Rs 2.00 107 Rs 1.80 138

Maize Rs 2.60 62 Rs 1.75 57

Total --- --- --- ---

Weighted-Aggregative Price index P°¹ = ∑P¹q¹/∑P°q¹x100
Weighted Average of Relatives Price index = ∑(P°q¹)*P¹/P°/∑P
Q 5.30 : The Prices and Quantities of three Commodities during 1997 and 2007 are giv
Compute Weighted-Aggregative Price index for 2007 with 1997 = 100 by
(i) Laspayres Method (ii) Paasche's Method.
Price (Rs.) Quantity
Commodity
1997 2007 1997 2007

A Rs 12.00 Rs 10.00 501 600

B Rs 38.00 Rs 50.00 100 194

C Rs 40.00 Rs 40.00 56 76
1997 Base Year 2007 Current Year
Commodity
P° q° P¹ q¹
A Rs 12.00 501 Rs 10.00 600

B Rs 38.00 100 Rs 50.00 194

C Rs 40.00 56 Rs 40.00 76

Total --- --- --- ---

By Laspayre's Method P°¹ = ∑P¹q°/∑P°q°X100 = 101.64288
By Paasche's Method P°¹ = ∑P¹q¹/∑P°q¹X100 = 106.40472
Q 5.31 : Compute the following index numbers for the following data of Question of 5
Paasche's Method :
(i) Weighted Aggregative Price index. (ii) Weighted Average of Relative Price index.
2003 2007
Groups
Tons Price (£) Tons Price (£)

A 50 £ 85.00 45 £ 116.00

B 120 £ 34.00 185 £ 42.00

C 35 £ 10.00 68 £ 15.00
 C 35 £ 10.00 68 £ 15.00

D 210 £ 48.00 250 £ 50.00

Base Year Current Year
Groups
P° q° P¹ q¹
A £ 85.00 50 £ 116.00 45

B £ 34.00 120 £ 42.00 185

C £ 10.00 35 £ 15.00 68

D £ 48.00 210 £ 50.00 250

Total --- --- --- ---

Weighted Aggregative Price Index By Paasche's Method P°¹ = ∑P¹q¹/∑P°q¹X100
Weighted Average Relative Price Index By Paasche's Method: P°¹ = ∑(P°q¹)*P¹/P°
mate the overall effect of Price changes
used in 2003. Calculate this index for

P°q° P¹ q °

4250 5800

£ 4,080.00 £ 5,040.00

£ 350.00 £ 525.00

£ 10,080.00 £ 10,500.00

18760 21865

wn below :
s weights, compute the weighted-Aggregative
2005.
, compute the Weighted-Aggregative Price index and the
s weights, compute the weighted-

2005.
Price Relatives (P°q°)*P¹/P°
P°q° P¹ q ° P¹/P°

248.50 223.65 0.9 223.65

214.00 192.60 0.9 192.60

161.20 108.50 0.673076923076923 108.50

623.70 524.75 --- 524.75

∑P°q°x100 = Rs 84.14
P°q°)*P¹/P°/∑P°q°X 100 = Rs 84.14
, compute the Weighted-Aggregative Price index

Price Relatives (P°q¹)*P¹/P°

P°q¹ P¹q¹ P¹/P°

280.00 252.00 0.9 252.00

276.00 248.40 0.9 248.40

148.20 99.75 0.673076923076923 99.75

704.20 600.15 --- 600.15

∑P°q¹x100 = 85.22
P°q¹)*P¹/P°/∑P°q¹X 100 = 85.22
997 and 2007 are given below :
100 by

P°q° P¹q° P°q¹ P¹q¹

6012 5010 7200 6000

Rs 3,800.00 Rs 5,000.00 7372 Rs 9,700.00

Rs 2,240.00 Rs 2,240.00 Rs 3,040.00 Rs 3,040.00

12052 12250 17612 18740

data of Question of 5.28 by

lative Price index.

 Price Relatives
P¹q¹ P°q¹ P¹/P° (P°q¹)*P¹/P°

5220 3825 1.36470588235 5220

£ 7,770.00 £ 6,290.00 1.23529411765 £ 7,770.00

£ 1,020.00 £ 680.00 1.5 £ 1,020.00

£ 12,500.00 £ 12,000.00 1.04166666667 £ 12,500.00

26510 22795 --- 26510

P¹q¹/∑P°q¹X100 = 116.2974336
¹ = ∑(P°q¹)*P¹/P°/∑P°q¹X100 = 116.29743
q°)*P¹/P°

223.65

192.60

108.50

524.75

q¹)*P¹/P°

252.00

248.40

99.75

600.15
Q 5.32 : Construct the following index numbers of Prices for 2004 and 2005 from the
data.
(i) Base Year Weighted, (ii) Current Year Weighted.

Prices (Rs. Per 40 Kg) Quantities (To

Commodity
2000 (base) 2004 2005 2000

A Rs 70.50 Rs 80.65 Rs 85.00 270

B Rs 146.95 Rs 155.00 Rs 154.75 24

C Rs 25.50 Rs 32.50 Rs 30.50 130

D Rs 64.75 Rs 75.00 Rs 60.95 185

2003 (base) 2004

Commodity
P° q° P¹ q¹
A Rs 70.50 270 Rs 80.65 276

B Rs 146.95 24 Rs 155.00 18

C Rs 25.50 130 Rs 32.50 121

D Rs 64.75 185 Rs 75.00 267

Total --- --- --- ---

(i) Base Year Weighted indices :
index for 2004 (P2004) = ∑P¹q°/∑P°q°X100 = 115.16277
index for 2005 (P2005) = ∑P²q°/∑P°q°X100 = 110.69645
(ii) Current Year Weighted indices :
index for 2004 (P2004) = ∑P¹q¹/∑P°q¹X100 = 115.3732
index for 2005 (P2005) = ∑P²q²/∑P°q²X100 = 107.27507
Q 5.33 : Compute the index numbers of Marshall-Edgeworth and Fisher's ideal Type
 Base Year Current Year

Commodity Price Quantity Price Quantity

P° q° P¹ q¹

A 7 70 5 49

B 5 27 7 28

C 10 35 9 29

D 9 50 4 42

E 3 16 10 25
Base Year Current Year

Commodity Price Quantity Price Quantity

P° q° P¹ q¹

A 7 70 5 49

B 5 27 7 28

C 10 35 9 29

D 9 50 4 42

E 3 16 10 25

Total --- --- --- ---

Fisher's Index numbers :
√ ∑P¹q°/∑P°q°X∑P¹q¹/∑P°q¹X100 = 86.770429
Marshall-Edgeworth Index numbers :
∑P¹q°+∑P¹q¹/P°q°+∑P°q¹X100 = 86.476473
Q 5.34 : Given the following, construct Fisher's ideal index number for
(i) 1964, taking 1957 as base year (ii) 1957, taking 1964 as base year.

1957 1964
Commodity
Price Quantity Price Quantity

Rice 9.3 100 4.5 90

Wheat 6.4 11 3.7 19

Jawar 5.1 5 2.7 3

Base Year Current Year
Commodity Price Quantity Price Quantity
P° q° P¹ q¹

Rice 9.3 100 4.5 90

Wheat 6.4 11 3.7 19

Jawar 5.1 5 2.7 3

--- --- --- ---

Total (ii) taking 1964 as a base year
P¹ q¹ P° q°
(i) Fisher's index for 1964 :
√ ∑P¹q°/∑P°q°X∑P¹q¹/∑P°q¹X100 = 49.390685
(ii) Fisher's index for 1957 :
√ ∑P¹q°/∑P°q°X∑P¹q¹/∑P°q¹X100 = 202.46733
Q 5.35 : Using 2003 as base, construct Price index numbers from the following foodgr
Prices (Rs. Per 40 Kg) Production(000
Commodity
2003 2004 2005 2003
 Wheat 9.35 8.12 8.78 3974

Rice 11.25 11.73 12.08 973

Gram 7 7.68 8.23 755

Base Year 2003 Current YearYears
Commodity
P° q° P¹ q¹
Wheat 9.35 3974 8.12 3862
Rice 11.25 973 11.73 852
Gram 7 755 7.68 601
Total --- --- --- ---
Index For 2004 :
By Laspayre's Method P°¹ = ∑P¹q°/∑P°q°X100 = 92.68081
Index For 2005 :
By Laspayre's Method P°¹ = ∑P²q°/∑P°q°X100 = 99.009256
4 and 2005 from the given

Quantities (Tons)
2004 2005

276 290

18 44

121 137

267 355

2005 Products
P² q² P°q° P¹q° P²q°
Rs 85.00 290 Rs 19,035.00 21775.5 22950

Rs 154.75 44 Rs 3,526.80 Rs 3,720.00 Rs 3,714.00

Rs 30.50 137 Rs 3,315.00 Rs 4,225.00 Rs 3,965.00

Rs 60.95 355 Rs 11,978.75 Rs 13,875.00 Rs 11,275.75

--- --- 37855.55 43595.5 41904.75

d Fisher's ideal Type for the following data.

P°q° P¹q° P°q¹ P¹q¹

490 350 343 245

135 189 140 196

350 315 290 261

450 200 378 168

48 160 75 250

1473 1214 1226 1120

 P°q° P¹q° P°q¹ P¹q¹

930 450 837 405

70.4 40.7 121.6 70.3

25.5 13.5 15.3 8.1

1025.9 504.2 973.9 483.4

P¹q¹ P°q¹ P¹q° P°q°

the following foodgrain data.

Production(000 Tons)

2004 2005
 3862 3930

852 722

601 744
urrent YearYears
P°q° P¹q° P²q°
P² q²
8.78 3930 37156.9 32268.88 34891.72

12.08 722 10946.25 11413.29 11753.84

8.23 744 5285 5798.4 6213.65

--- --- 53388.15 49480.57 52859.21

Products
P°q¹ P¹q¹ P°q² P²q²
19458 22259.4 20445 24650

Rs 2,645.10 Rs 2,790.00 Rs 6,465.80 Rs 6,809.00

Rs 3,085.50 Rs 3,932.50 Rs 3,493.50 Rs 4,178.50

Rs 17,288.25 Rs 20,025.00 Rs 22,986.25 Rs 21,637.25

42476.85 49006.9 53390.55 57274.75

Q 5.36 : Calculate (i) Laspeyre's index, (ii) Paasche's index, (iii) Fisher's ideal index, (iv
Marshall-Edgeworth index, (v) Walsh index & (vi) Palgrave index
for the following dairy Products.

Dairy Prices Quantities Prod

Products
1998(base) 1999 2007 1998

Milk 3.95 3.89 4.13 9675

Butter 61.5 62.2 59.7 118

Cheese 34.8 35.4 38.9 78

Base Year 1998 Current YearYears

P° q° P¹ q¹ P²
3.95 9675 3.89 9717 4.13

61.5 118 62.2 116 59.7

34.8 78 35.4 78 38.9

Dairy
Products P°q° P¹q° P²q° P°q¹

Milk 38216.25 37635.75 39957.75 38382.15

Butter 7257 7339.6 7044.6 7134

Cheese 2714.4 2761.2 3034.2 2714.4

Total 48187.65 47736.55 50036.55 48230.55

(i) Laspeyre's index :

Index For 1999 :
By Laspayre's Method P°¹ = ∑P¹q°/∑P°q°X100 = 99.063868
Index For 2007 :
By Laspayre's Method P°¹ = ∑P²q°/∑P°q°X100 = 103.83688
(ii) Paasche's index :
Index For 1999 :
By Paasche's Method P°¹ = ∑P¹q¹/∑P°q¹X100 = 99.056573
Index For 2007 :
By Paasche's Method P°¹ = ∑P²q²/∑P°q²X100 = 103.92233
(iii) Fisher's ideal index :
Index For 1999 :
√ ∑P¹q°/∑P°q°X∑P¹q¹/∑P°q¹X100 = 98.595463
Index For 2007 :
√ ∑P²q°/∑P°q°X∑P²q²/∑P°q²X100 = 105.8537
(iv) Marshall-Edgeworth index :
Index For 1999 :
∑P¹q°+∑P¹q¹/P°q°+∑P°q¹X100 = 99.060219
Index For 2007 :
∑P²q°+∑P²q²/P°q°+∑P°q²X100 = 103.88091
(v) Walsh index Method:

Dairy
Products √q°q¹ √q°q² P°√q°q¹ P¹√q°q¹
Milk 9695.9772586 10048.298363 38299.110172 37717.351536

Butter 116.99572642 116.99572642 7195.2371747 7277.1341832

Cheese 78 80.46117076 2714.4 2761.2

Total --- --- 48208.747346 47755.685719

Index For 1999 :
∑P¹√q°q¹/∑P°√q°q¹X100 = 99.060209
Index For 2007 :
∑P²√q°q²/∑P°√q°q²X100 = 103.88035
(vi) Palgrave index Method :
Dairy P¹/P° P²/P° P¹q¹(P¹/P°) P²q²(P²/P°)
Products
Milk 0.9848101266 1.0455696203 37224.966 45064.7616202532
Butter 1.0113821138 0.9707317073 7297.3242276 6722.5112195122
Cheese 1.0172413793 1.117816092 2808.8068966 3609.09281609195
Total --- --- 47331.097124 55396.3656558573
Index For 1999 :
∑P¹q¹(P¹/P°)/∑P¹q¹X100 = 99.069748
Index For 2007 :
∑P²q²(P²/P°)/∑P²q²X100 = 104.02179
Q 5.37 (b) : The Following table shows the average Prices Per Quarter.
Taking 1960 as base, Construct a Price index number for the Three Cereal
Together, for 1961 and for 1962, using the Weight 12 for Wheat, 8 for Barley
and 5 for Maize.

Cereals 1960 1961 1962

Wheat Rs 110.70 Rs 122.85 Rs 129.00

Barley Rs 99.50 Rs 124.55 Rs 120.50

Maize Rs 60.25 Rs 74.90 Rs 76.25

Cereals 1960 1961 1962 Weight

P° P¹ P² W
 Cereals 1960 1961 1962 Weight
P° P¹ P² W
Wheat Rs 110.70 Rs 122.85 Rs 129.00 12.00

Barley Rs 99.50 Rs 124.55 Rs 120.50 8.00

Maize Rs 60.25 Rs 74.90 Rs 76.25 5.00

Total --- --- --- 25.00

Price index for 1961 :

∑(P¹/P°)W/∑W X100 = 118.18764
Price index for 1961 :
∑(P²/P°)W/∑W X100 = 119.99993
Q 5.38 : Compute Fisher's Price index number for 1976 with 1961 as base from the fo
Quantity (units) Value (Rs.)
Commodity
1961 1976 1961 1976

A 100.00 150.00 Rs 600.00 Rs 1,200.00

B 80.00 100.00 Rs 400.00 Rs 700.00

C 60.00 72.00 Rs 180.00 Rs 432.00

D 30.00 33.00 Rs 450.00 Rs 363.00

Quantity (units) Value (Rs.)
Commodity
1961(q°) 1976(q¹) 1961(P°q°) 1976(P¹q¹)

A 100.00 150.00 600.00 1200.00

B 80.00 100.00 400.00 700.00

C 60.00 72.00 180.00 432.00

D 30.00 33.00 450.00 363.00

 Total --- --- 1630.00 2695.00

Fisher's ideal index :

Index For 1976 :
√ ∑P¹q°/∑P°q°X∑P¹q¹/∑P°q¹X100 = 142.1024366
Q 5.39 : Compute The Quantity and Price index numbers from the following data :
Quantity (units) Value (£)
Commodity
1997(q°) 2007(q¹) 1997(P°q°) 2007(P¹q¹)

1 100 150 500 900

2 80 100 320 500

3 60 72 150 360

4 30 33 360 297
Quantity (units) Value (£)
Commodity
1997(q°) 2007(q¹) 1997(P°q°) 2007(P¹q¹)

1 100 150 500 900

2 80 100 320 500

3 60 72 150 360

4 30 33 360 297

Total --- --- 1330.00 2057.00

Quantity Index :
For 2007 for 1997 base Year :
Q°¹=∑P°q¹/∑P°q°X100 = 129.77444
For 1997 for 2007base Year :
 Q¹°=∑P¹q°/∑P¹q¹X100 = 76.324745
Price index :
For 2007 for 1997 base Year :
P°¹=∑P¹q°/∑P°q°X100 = 118.04511
For 1997 for 2007base Year :
P¹°=∑P°q¹/∑P¹q¹X100 = 83.908605
her's ideal index, (iv)

Quantities Produced

1999 2007

9717 10436

116 116

78 83
ars

q²
10436

116

83

P¹q¹ P°q² P²q²

37799.13 41222.2 43100.68

7215.2 7134 6925.2

2761.2 2888.4 3228.7

47775.53 51244.6 53254.58

 P°√q°q² P²√q°q²
39690.778535 41499.472241

7195.2371747 6984.6448671

2800.0487424 3129.9395425

49686.064453 51614.056651
q²(P²/P°)

4.7616202532

.5112195122

.09281609195

6.3656558573

arter.
ee Cereal
8 for Barley

Price Relatives

(P¹/P°)W (P²/P°)W
 (P¹/P°) (P²/P°) (P¹/P°)W (P²/P°)W
1.11 1.17 13.32 13.98

1.25 1.21 10.01 9.69

1.24 1.27 6.22 6.33

--- --- 29.55 30.00

1 as base from the following data :

Unit Price
P¹q° P°q¹
P° P¹
6.00 8.00 800.00 900.00

5.00 7.00 560.00 500.00

3.00 6.00 360.00 216.00

15.00 11.00 330.00 495.00

 --- --- 2050.00 2111.00

the following data :

Unit Price
P°q¹ P¹q°
P° P¹
5 6 750 600

4 5 400 400

2.5 5 180 300

12 9 396 270

--- --- 1726.00 1570.00

Q 5.40 : The Prices and Quantities of three Commodities during 1955 and 1965 are giv
Using 1955 as the base period and base period Quantities as the Weights, Compute th
Price index and the Weighted average of Relative price index for 1965.

1955 1965
Commodity
P° q° P¹
A 10 501 12

B 40 100 38

C 50 76 40
1955 1965
Commodity
P° q° P¹
A 10 501 12

B 40 100 38

C 50 76 40

Total --- --- ---

Weighted Aggregative Price index for 1965 :
By Laspayre's Method P°¹ = ∑P¹q°/∑P°q°X100 =
Weighted average of Relative price index for 1965 :
By Laspayre's Method P°¹ =∑(P¹/P°)*(P°q°)/∑P°q°X 100

Q 5.41 : Compute a Quantity index number for (i) 1943 on 1938 as base, using 1938 V
and another for (ii) 1938 on 1943 as base, using 1943 values as Weights.

Export of Cotton Yarns and Manufactures

Articles Quantity Values(in 000 £)
 Articles
1938 1943 1938

A 10.00 5.40 £ 397.00

Cotton
B 2.90 2.80 £ 278.00

A 35.30 69.30 £ 841.00

B 21.60 83.20 £ 776.00

Cotton
Manufactures
C 81.90 102.90 £ 1,452.00

D 68.80 90.20 £ 1,028.00

Export of Cotton Yarns and Manufactures
Articles Quantity Values(in 000 £)
1938(q°) 1943(q¹) 1938(W°)

A 10.00 5.40 397.00

Cotton
B 2.90 2.80 278.00

A 35.30 69.30 841.00

B 21.60 83.20 776.00

Cotton
Manufactures
C 81.90 102.90 1452.00

D 68.80 90.20 1028.00

Total --- --- 4772.00

index for 1943 on 1938 as base :

∑(q¹/q°)*(W°)/∑W°X100 = 173.82487
index for 1938 on 1943 as base :
∑(q°/q¹)*(W¹)/∑W¹X100 = 69.991565
 Q 5.42 : An inquiry into the budgets of the middle class families in a city in England g
information.What changes in cost of living Figures of 1929 as compared with that o

Expenses on Food 35% Rent 15% Clothing 20% Fuel 10%

Price (1928) £ 150.00 £ 30.00 £ 75.00 £ 25.00

Price (1929) £ 145.00 £ 30.00 £ 65.00 £ 23.00

Price Relative Price Relative

Expenses on Weight (W) 1928 1929 (l)

Food 35 100 96.666666667

Rent 15 100 100

Clothing 20 100 86.666666667

Fuel 10 100 92

Misc. 20 100 112.5

Total 100 --- ---

Cost of living index number for 1929 :
∑lXW/∑W = 97.866667
Q 5.43 : Compute the consumer Price index number for 1940 on the basic of 1939 fro
Using (i) Aggregative Expenditure Method and (ii) The Household Budget Method.
Quantity Unit Price Price
Commodity Consumed in of in in
1939 Price 1939 1940

Rice 240 Kg. Rs.Per Kg 5.75 6.00

Wheat 240 Kg. Rs.Per Kg 5.00 8.00
Gram 40 Kg. Rs.Per Kg 6.00 9.00
Sugar 40 Kg. Rs.Per Kg 20.00 15.00
 Sugar 40 Kg. Rs.Per Kg 20.00 15.00
Arhar 240 Kg. Rs.Per Kg 8.00 10.00
Ghee 4 Kg. Rs.Per Kg 2.00 1.50
Quantity Unit Price Price
Commodity Consumed in of in in
1939(q°) Price 1939(P°) 1940(P¹)

Rice 240 Kg. Rs.Per Kg 5.75 6.00

Wheat 240 Kg. Rs.Per Kg 5.00 8.00

Gram 40 Kg. Rs.Per Kg 6.00 9.00

Sugar 40 Kg. Rs.Per Kg 20.00 15.00

Arhar 240 Kg. Rs.Per Kg 8.00 10.00

Ghee 4 Kg. Rs.Per Kg 2.00 1.50

Total --- --- --- ---

(i) Aggregative Expenditure Method :
∑P¹q°/∑P°q° X100 = 121.23288
Quantity Unit Price Price
Commodity Consumed in of in in
1939(q°) Price 1939(P°) 1940(P¹)

Rice 240 Kg. Rs.Per Kg 5.75 6.00

Wheat 240 Kg. Rs.Per Kg 5.00 8.00

Gram 40 Kg. Rs.Per Kg 6.00 9.00

Sugar 40 Kg. Rs.Per Kg 20.00 15.00

Arhar 240 Kg. Rs.Per Kg 8.00 10.00

Ghee 4 Kg. Rs.Per Kg 2.00 1.50

 Ghee 4 Kg. Rs.Per Kg 2.00 1.50

Total --- --- --- ---

(ii) The Household Budget Method :
∑WxI/∑W = 121.23288
5 and 1965 are given below:
eights, Compute the Weighted-Aggregative
65.

1965
q¹
600

194

56
1965
P¹q° P°q° P¹/P° (P¹/P°)*(P°q°)
q¹
600 6012 5010 1.2 6012
194 3800 4000 0.95 3800
56 3040 3800 0.8 3040
--- 12852 12810 --- 12852

100.32787

= 100.32787
base, using 1938 Values as Weights;
ghts.

Manufactures
Values(in 000 £)
 1943

£ 817.00

£ 315.00

£ 2,854.00

£ 3,319.00

£ 5,805.00

£ 6,381.00
Manufactures
Values(in 000 £) (q¹/q°)*(W°) (q°/q¹)*(W¹)
1943(W¹)

817.00 214.38 1512.96

315.00 268.41 326.25

2854.00 1651.03 1453.77

3319.00 2989.04 861.66

5805.00 1824.31 4620.31

6381.00 1347.76 4867.10

19491.00 8294.92266501356 13642.06

 a city in England gave the following
mpared with that of 1928 are seen?

Fuel 10% Misc. 20%

£ 25.00 £ 40.00

£ 23.00 £ 45.00

lXW
3383.3333333

1500

1733.3333333

920

2250

9786.6666667

e basic of 1939 from the followingdata,

udget Method.
Price
in
1940

6.00

8.00

9.00

15.00
 15.00

10.00

1.50
Price
in P°q° P¹q°
1940(P¹)

6.00 1380.00 1440.00

8.00 1200.00 1920.00

9.00 240.00 360.00

15.00 800.00 600.00

10.00 1920.00 2400.00

1.50 8.00 6.00

--- 5548.00 6726.00

Price
I=
in
(P¹/P° X100)
W = P°q° WxI
1940(P¹)

6.00 104.35 1380.00 144000.00

8.00 160.00 1200.00 192000.00

9.00 150.00 240.00 36000.00

15.00 75.00 800.00 60000.00

10.00 125.00 1920.00 240000.00

1.50 75.00 8.00 600.00

1.50 75.00 8.00 600.00

--- --- 5548.00 672600.00

/P°)*(P°q°)

6012

3800

3040

12852
Q 5.44 : Compute the Consumer Price index number for the Following data for 2007 w
base.
Use as Weights (i) The Quantities Consumed in the base year (ii) The value in the base

Price Price
Quantity
Article 2000 in in
2000 2007

Food 5 mounds 18.00 26.50

Cloth 30 meter 2.60 2.80
Electricity 75 units 0.25 0.30
Rent 3 rooms 30.00 27.50
Misc. 34 units 0.50 0.60
Quantity Price Price
Article
2000 (q°)
in in P°q°
2000 (P°) 2007 (P¹)

Food 5.00 18.00 26.50 90

Cloth 30.00 2.60 2.80 78.00
Electricity 75.00 0.25 0.30 18.75
Rent 3.00 30.00 27.50 90.00
Misc. 34.00 0.50 0.60 17.00
Total --- --- --- 293.75
(i) The Consumer Price index for 2007 :
∑P¹q°/∑P°q° X100 = 116.39149
Quantity Price Price
Article
2000 (q°)
in in P¹q°
2000 (P°) 2007 (P¹)
 Price Price
Quantity
Article
2000 (q°)
in in P¹q°
2000 (P°) 2007 (P¹)

Food 5.00 18.00 26.50 132.50

Cloth 30.00 2.60 2.80 84.00

Electricity 75.00 0.25 0.30 22.50

Rent 3.00 30.00 27.50 82.50

Misc. 34.00 0.50 0.60 20.40

Total --- --- --- 341.90

(i) The Consumer Price index for 2000 :

∑WxI/∑W = 116.39149
Q 5.45 : Calculate an index number of retail Prices for the Following selection of food
1 Sept. 2003 (July 2000 = 100).

Purchases July 1 Sept.

Item Unit (Units) 2000 2003

Flour Kilogram 18 1.90 2.30

Meat Kilogram 2 22.00 28.00

Bread 200 Gram 2 1.00 1.50

Tea 450 Gram 4 8.25 10.35

Sugar Kilogram 3 7.00 7.75

Milk Liter 2.5 3.50 4.00

Butter 450 Gram 2 12.30 15.00

Eggs Dozen 1.5 6.50 10.50

Potatoes Kilogram 10 2.60 3.20

 Potatoes Kilogram 10 2.60 3.20
Purchases July 1 Sept.
Item Unit
(Units) (q°) 2000 (P°) 2003 (P¹)

Flour Kilogram 18 1.90 2.30

Meat Kilogram 2 22.00 28.00

Bread 200 Gram 2 1.00 1.50

Tea 450 Gram 4 8.25 10.35

Sugar Kilogram 3 7.00 7.75

Milk Liter 2.5 3.50 4.00

Butter 450 Gram 2 12.30 15.00

Eggs Dozen 1.5 6.50 10.50

Potatoes Kilogram 10 2.60 3.20

Total --- --- --- ---

(i) The Price index for 2003:
∑P¹q°/∑P°q° X100 = 124.34825
Q 5.46 : Compute the following from the given data : (i) Fisher's Quantity index numb
(ii) Simple-Aggregative value index for 2006.
Quantity (Units) Value
Commodity
2001 2006 2001 2006

A 100 150 600 1200

B 80 100 400 700

C 60 72 180 432

D 30 33 450 363
 Quantity (Units) Value Pr
q° q¹ q°P° P¹q¹ P°=q°P°/q°
100 150 600 1200 6

80 100 400 700 5

60 72 180 432 3

30 33 450 363 15

Total --- --- 1630 2695 ---

(i) Fisher's Quantity index number for 2006 :
√ ∑P¹q°/∑P°q°X∑P¹q¹/∑P°q¹X100 = 142.10244
(ii) Simple-Aggregative value index for 2006 :
∑P¹q¹/∑q°P° X 100 = 165.33742
Q 5.47 : Compute the following from given data (i) A Simple Aggregative value index
(ii) An index of Average values, for each year from the following data :
Year Declared Value Values on the basic of 2002 values

2002 860 860

2003 950 832

2004 1300 807

2005 1450 704

V° V¹ P°q¹ P¹q¹ P°q²

4560 3203 832 950 807
(i) A Simple Aggregative value index :
∑V¹/∑V° X100 = 70.241228
(ii) An index of Average values for each Year :
For 2003 :
∑P¹q¹/∑P°q¹ X100 = 114.18269
For 2004 :
∑P²q²/∑P°q² X100 = 161.09046
For 2005 :
∑P³q³/∑P°q³ X100 = 205.96591
owing data for 2007 with2000 as
) The value in the base year.

P¹q°

132.50

84.00

22.50

82.50

20.40

341.90

I =(P¹/P° X100) W = P°q° WxI

 I =(P¹/P° X100) W = P°q° WxI
147.222222222222 90 13250

107.692307692308 78 8400

120 18.75 2250

91.6666666666667 90 8250

120 17 2040

--- 293.75 34190

wing selection of foodstuffs on

1 Sept.
2003

2.30

28.00

1.50

10.35

7.75

4.00

15.00

10.50

3.20
 3.20
1 Sept.
2003 (P¹)
P°q° P¹q°

2.30 34.20 41.40

28.00 44.00 56.00

1.50 2.00 3.00

10.35 33.00 41.40

7.75 21.00 23.25

4.00 8.75 10.00

15.00 24.60 30.00

10.50 9.75 15.75

3.20 26.00 32.00

--- 203.30 252.80

Quantity index number for 2006

alue
2006

1200

700

432

363
 Price
P°=q°P°/q° P¹=P¹q¹/q¹ P°q¹ P¹q°
6 8 900 800

5 7 500 560

3 6 216 360

15 11 495 330

--- --- 2111 2050

gregative value index

g data :
of 2002 values

P°q² P²q² P°q³ P³q³

807 1300 704 1450