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QUESTION 1
By using the data in the table below, for 2017 with 2010 as base year:
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 the unweighted price index for 2017 with 2010 as base.
To find the unweighted price index for 2017 with 2010 as the base, we can use the formula:
Price index = (Value of market basket in current year / Value of market basket in base year) x 100
First, we need to calculate the total values for each year:
2010:
Total price = (p0 * q0) + (p1 * q0) + (p0 * q1) = (95 * 90) + (75 * 100) + (95 * 100) = 8550 + 7500 + 9500 = 25550
2017:
Total price = (p0 * q1) + (p1 * q1) + (p0 * q1) = (95 * 90) + (75 * 80) + (95 * 50) = 8550 + 6000 + 4750 = 19300
Now, we can calculate the unweighted price index for 2017 with 2010 as the base:
Price index = (19300 / 25550) x 100 ≈ 75.54
Therefore, the unweighted price index for 2017 with 2010 as the base is approximately 75.54.