By using the data in the table below, calculate for 2015 with 2012 as base year:

Question

2012 2015
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 the price index for product II.

100


120


105


80


110

Answer 1

To calculate the price index for product II in 2015 with 2012 as the base year, we use the formula:

Price Index = (Total Expenditure on Product II in 2015 / Total Expenditure on Product II in 2012) * 100

First, we need to calculate the total expenditure on Product II in 2012 and 2015:

Total expenditure on Product II in 2012 (p0q0) = 50 * 20 = 1000
Total expenditure on Product II in 2015 (p1q1) = 40 * 40 = 1600

Now we can calculate the price index for Product II:

Price Index = (1600 / 1000) * 100 = 160%

Therefore, the price index for Product II is 160, which is closest to the answer choice of 160. So, the correct answer is:

120