The following are the prices of commodities in 2010 and 2015. Calculate a price index based on price relatives using arithmetic mean:
|
Year |
A |
B |
C |
D |
E |
F |
|
2010 |
55 |
60 |
20 |
50 |
85 |
120 |
|
2015 |
65 |
70 |
30 |
75 |
90 |
130 |
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 124.84
|
Commodity |
2010 ($p_0$) |
2015 ($p_1$) |
$PR=\frac{p_1}{p_0}×100$ |
|
A |
55 |
65 |
$\frac{6500}{55} = 118.18$ |
|
B |
60 |
70 |
$\frac{7000}{60} = 116.67$ |
|
C |
20 |
30 |
$\frac{3000}{20} = 150.00$ |
|
D |
50 |
75 |
$\frac{7500}{50} = 150.00$ |
|
E |
85 |
90 |
$\frac{9000}{85} = 105.88$ |
|
F |
120 |
130 |
$\frac{13000}{120} = 108.33$ |
|
|
|
|
$\sum P_R = 749.06$ |
Price Index $= P_{01} = \frac{\sum P_R}{N} = \frac{749.06}{6} = 124.84$