Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Index Numbers and Time Based Data

Question:

Given $∑p_0q_0=800, ∑p_0q_1=1500, ∑p_1q_1= 1300$ and $∑p_1q_0= 900, $ where subscripts 0 and 1 are used for base year and current year respectively. The Paasche's index number is :

Options:

88.9

115.4

144.4

86.7

Correct Answer:

86.7

Explanation:

Paasche’s price index formula

$P_p=\frac{\sum p_1 q_1}{\sum p_0 q_1}\times100$

Given

$\sum p_1 q_1=1300$

$\sum p_0 q_1=1500$

Substitute

$P_p=\frac{1300}{1500}\times100$

$=\frac{13}{15}\times100$

$=86.67$

Paasche’s index number = 86.67