STA304 Assignment 1 Solution 2021 - VU Answer

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STA304 ASSIGNMENT 1 SOLUTION FALL 2021 

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Question 1: 

Given the prices of three commodities, Using 1990 as the base period, compute, simple average of relatives price indices using

1. A.M

2. Median

Year	Prices
	A	B	C
1990	30.00	12.00	20.00
1991	30.50	13.50	23.50
1992	32.50	14.50	25.00
1993	32.50	14.00	25.00

Solution:

Year	Prices			Total	Mean	Median
	A	B	C
1990	100	100	100	300	100	100
1991	102	113	118	332	111	113
1992	108	121	125	354	118	121
1993	108	117	125	350	117	117

Question 2:

Construct the following weighted aggregative price index numbers (by using Paasche’s formula) for 1960 by using 1956 as a base period.

Commodity	Prices 1956        1956		Quantities 1956        1960
A	600	1200	100	150
B	400	700	80	100
C	180	432	60	72
D	450	363	30	33

Solution:

Commodity	Prices		Quantities		P1Q1	P0Q1
	1956 (Po)	1960 (P1)	1956 (Qo)	1960 (Q1)
A	600	1200	100	150	180000	90000
B	400	700	80	100	70000	40000
C	180	432	60	72	31104	12960
D	450	363	30	33	11979	14850
					293083	157810

Index for 1960