Question

From the following data compute Laspeyres' ideal quantity index.

Items	$2009$	$2009$	$2010$	$2010$
	Price (Rs.)	Total value (Rs.)	Price (Rs.)	Total value (Rs.)
$A$	$5$	$50$	$4$	$48$
$B$	$8$	$48$	$7$	$49$
$C$	$6$	$18$	$5$	$20$

• A. $107.00$
• B. $83.62$
• C. $92.65$
• D. $115.65$

Answer 1

The correct option is B $83.62$

Item	2009	2009	2010	2010
	$P_0$	$Q_0=\frac{Value}{P_0}$	$P_1$	$Q_1=\frac{Value}{P_1}$	$P_0{Q}_0$	$P_0{Q}_1$	$P_1{Q}_0$	$P_1{Q}_1$
A	5	10	4	12	50	60	40	48
B	8	6	7	7	48	56	42	49
C	6	3	5	4	18	24	15	20

From the table we get:

$\Sigma P_0{Q}_0=116$

$\Sigma P_0{Q}_1=140$

$\Sigma P_1{Q}_0=97$

$\Sigma P_1{Q}_1=117$

Laspeyres Price Index Number
$P_{01}^L=\frac{\sum P_1{Q}_0}{\sum P_0{Q}_0}\times 100=\frac{97}{116}\times 100=83.62$