6 / 10125%1) The table below gives the price and consumption (usage/sales) for two products x andy for four years. Using year 2000 as the base year calculate for each year, theb) Laspeyers price index, andQuantity x, qxa) Basic expenditure indexPrice ofc) Paasche price indexQuantity y, q,YearPrice of y, Pyx, Px2000R4R332001R56R46.2002R64R542003R64R742) Below is a table of items consumed in a hotel for three years together with the averageprice of each item for each of the three years. Using 2003 as the base year, calculate foreach subsequent year, thea) Basic expenditure index b) Laspeyers price index, and c) Paasche price indexd) Laspeyers volume index e) Paasche volume index

a) Base Year = 2000 The simple expenditure index formula, Index=∑Current year price ×Current year…

1) The table below gives the price and consumption (usage/sales) for two products x and y for four years. Using year 2000 as the base year calculate for each year, the a) Basic expenditure index b) Laspeyers price index, and c) Paasche price index Price of y, Py Year Price of Quantity x, qx Quantity y, qy x, Px 2000 R4 5 R3 3 2001 R5 6 R4 2002 R6 4 R5 4 2003 R6 4 R7 4

1) The table below gives the price and consumption (usage/sales) for two products x and y for four years. Using year 2000 as the base year calculate for each year, the a) Basic expenditure index b) Laspeyers price index, and c) Paasche price index Price of y, Py Year Price of Quantity x, qx Quantity y, qy x, Px 2000 R4 5 R3 3 2001 R5 6 R4 2002 R6 4 R5 4 2003 R6 4 R7 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

6 / 10
125%
1) The table below gives the price and consumption (usage/sales) for two products x and
y for four years. Using year 2000 as the base year calculate for each year, the
b) Laspeyers price index, and
Quantity x, qx
a) Basic expenditure index
Price of
c) Paasche price index
Quantity y, q,
Year
Price of y, Py
x, Px
2000
R4
R3
3
2001
R5
6
R4
6.
2002
R6
4
R5
4
2003
R6
4
R7
4
2) Below is a table of items consumed in a hotel for three years together with the average
price of each item for each of the three years. Using 2003 as the base year, calculate for
each subsequent year, the
a) Basic expenditure index b) Laspeyers price index, and c) Paasche price index
d) Laspeyers volume index e) Paasche volume index

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Year 2001 2002 2003 2004 2005 Output Price Nom. GDP Real GDP 50 $23.00 $1,150.00 $1,350.00 52 $ 27.00 $1,404.00 $1,404.00 53 $ 30.00 $1,590.00 $1,431.00 51 $ 34.00 $1,734.00 $1,377.00 56 $31.00 $1,736.00 $1,512.00 Was the economy better off in 2003 or 2004? Explain