By using the data in the table below, for 2017 with 2010 as base year:

Question

2010 2017
Product p0 q0 p1 q1 p1q0 p0q0 p1q1 p0q1
I 95 90 75 100
II 80 70 65 80
III 40 80 45 50
Total A B C D E F


Find Paasche quantity index for 2017 with 2010 as base.

Answer 1

To find the Paasche Quantity Index for 2017 with 2010 as the base year, we can use the formula:

Paasche Quantity Index = (Σp1q1) / (Σp0q1)

First, we need to calculate the values of Σp1q1 and Σp0q1:

Σp1q1 = (75*100) + (65*80) + (45*50) = 7500 + 5200 + 2250 = 14950
Σp0q1 = (95*100) + (80*80) + (40*50) = 9500 + 6400 + 2000 = 17900

Now, we can substitute these values into the formula:

Paasche Quantity Index = 14950 / 17900 = 0.8358

Therefore, the Paasche Quantity Index for 2017 with 2010 as the base year is approximately 0.836.