By using the data in the table below, calculate for 2005 with 2002 as base year:

Question

2002 2005
Product p0 q0 p1 q1 p1q0 p0q0 p1q1 p0q1
I 60 50 70 40
II 50 20 40 40
III 30 30 30 40
Total A B C D E F


Find Laspeyres quantity index for 2005 with 2002 as base.

116.32


114.29


110.78


100


98.50

Answer 1

To calculate the Laspeyres quantity index for 2005 with 2002 as the base year, use the formula:

Laspeyres Quantity Index = (Σ(p0q1)/Σ(p0q0)) x 100

First, calculate the values for each product:

For Product I:
p0q1 = 60 * 40 = 2400
p0q0 = 60 * 50 = 3000

For Product II:
p0q1 = 50 * 40 = 2000
p0q0 = 50 * 20 = 1000

For Product III:
p0q1 = 30 * 40 = 1200
p0q0 = 30 * 30 = 900

Now, calculate the total values:
Σ(p0q1) = 2400 + 2000 + 1200 = 5600
Σ(p0q0) = 3000 + 1000 + 900 = 4900

Finally, plug in the values into the formula:
Laspeyres Quantity Index = (Σ(p0q1)/Σ(p0q0)) x 100
= (5600/4900) x 100
= 114.29

Therefore, the Laspeyres quantity index for 2005 with 2002 as the base year is 114.29.