Question

Construct the index number for 2016 taking 2006 as base by price relative method using arithmetic mean.

Commodities	:	A	B	C	D
Price in ₹ (2006)	:	10	20	30	40
Price in ₹ (2016)	:	13	17	60	70

[Index No. = 147.5]

Answer 1

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By Board Grade

Curriculum

1 - CBSE

Grade

13 - XI-Commerce

Subject

16 - Economics

Textbook

7 - NM Shah (2018)

Unit

Type Unit Name

Chapter

9 - Introduction to Index Numbers

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Page No

363

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6

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Question

Calcualte index number for 2017 on the base prices for 2013 from the following by average of price relative method.

Items	:	Bricks	Timber	Plaster Board	Sand	Cement
Price in ₹ (2013)	:	10	20	5	2	7
Price in ₹ (2017)	:	16	21	6	3	14

[Index No. = 147]

Solution

Comment

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Commodities	Prices in 2006 (p0)	Prices in 2016 (p1)	$\left(\frac{{\mathit{p}}_{\mathbf{1}}}{{\mathit{p}}_{\mathbf{0}}}\mathbf{\times }\mathbf{100}\right)$
A	10	13	$\frac{13}{10}\times 100=130$
B	20	17	$\frac{17}{20}\times 100=85$
C	30	60	$\frac{60}{30}\times 100=200$
D	40	70	$\frac{70}{40}\times 100=175$
			$\mathrm{\Sigma }\left(\frac{p_1}{p_0}\times 100\right)=590$

$p_{01}=\frac{\mathrm{\Sigma }\left({\displaystyle \frac{p_1}{p_0}\times 100}\right)}{N}=\frac{590}{4}=147.5$
Thus, index number is 147.5