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The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4?
Most Upvoted Answer
The ratio between Laspeyre’s index number and Paasche’s Index number i...
Given:
Laspeyre’s index number ratio = 28 : 27
To find:
The missing figure in the table, P.
Solution:
To find the missing figure in the table, we need to use the Laspeyre’s index number and Paasche’s index number.
Laspeyre’s Index number:
Laspeyre’s index number is calculated using the base year quantity and the current year prices. It measures the change in price levels by keeping the base year quantity constant.
Paasche’s Index number:
Paasche’s index number is calculated using the current year quantity and the current year prices. It measures the change in price levels by keeping the current year quantity constant.
Formula:
Laspeyre’s index number (L) = ∑(P1 × Q0) / ∑(P0 × Q0)
Paasche’s index number (P) = ∑(P1 × Q1) / ∑(P0 × Q1)
Given Table:
Commodity Base Year Current Year Price Quantity Price Quantity
X L 10 2 5
Y L 5 P 2
Calculating Laspeyre’s Index number:
Laspeyre’s index number (L) = (Price of X in Current Year × Quantity of X in Base Year + Price of Y in Current Year × Quantity of Y in Base Year) / (Price of X in Base Year × Quantity of X in Base Year + Price of Y in Base Year × Quantity of Y in Base Year)
Using the given values:
L = (5 × 2 + P × 5) / (10 × 2 + 5 × 5)
L = (10 + 5P) / 35
Calculating Paasche’s Index number:
Paasche’s index number (P) = (Price of X in Current Year × Quantity of X in Current Year + Price of Y in Current Year × Quantity of Y in Current Year) / (Price of X in Base Year × Quantity of X in Current Year + Price of Y in Base Year × Quantity of Y in Current Year)
Using the given values:
P = (5 × 2 + P × 2) / (10 × 2 + 5 × P)
P = (10 + 2P) / (20 + 5P)
Ratio between Laspeyre’s and Paasche’s Index number:
Given that the ratio between Laspeyre’s index number and Paasche’s index number is 28 : 27, we can write the equation as:
L / P = 28 / 27
Substituting the values of L and P:
[(10 + 5P) / 35] / [(10 + 2P) / (20 + 5P)] = 28 / 27
Solving the equation:
Cross multiplying the equation:
[(10 + 5P) / 35] × [(20 + 5P) / (10 + 2P)] = 28 / 27
Simplifying the equation:
[(10 + 5P) × (20 + 5P)] /
Laspeyre’s index number ratio = 28 : 27
To find:
The missing figure in the table, P.
Solution:
To find the missing figure in the table, we need to use the Laspeyre’s index number and Paasche’s index number.
Laspeyre’s Index number:
Laspeyre’s index number is calculated using the base year quantity and the current year prices. It measures the change in price levels by keeping the base year quantity constant.
Paasche’s Index number:
Paasche’s index number is calculated using the current year quantity and the current year prices. It measures the change in price levels by keeping the current year quantity constant.
Formula:
Laspeyre’s index number (L) = ∑(P1 × Q0) / ∑(P0 × Q0)
Paasche’s index number (P) = ∑(P1 × Q1) / ∑(P0 × Q1)
Given Table:
Commodity Base Year Current Year Price Quantity Price Quantity
X L 10 2 5
Y L 5 P 2
Calculating Laspeyre’s Index number:
Laspeyre’s index number (L) = (Price of X in Current Year × Quantity of X in Base Year + Price of Y in Current Year × Quantity of Y in Base Year) / (Price of X in Base Year × Quantity of X in Base Year + Price of Y in Base Year × Quantity of Y in Base Year)
Using the given values:
L = (5 × 2 + P × 5) / (10 × 2 + 5 × 5)
L = (10 + 5P) / 35
Calculating Paasche’s Index number:
Paasche’s index number (P) = (Price of X in Current Year × Quantity of X in Current Year + Price of Y in Current Year × Quantity of Y in Current Year) / (Price of X in Base Year × Quantity of X in Current Year + Price of Y in Base Year × Quantity of Y in Current Year)
Using the given values:
P = (5 × 2 + P × 2) / (10 × 2 + 5 × P)
P = (10 + 2P) / (20 + 5P)
Ratio between Laspeyre’s and Paasche’s Index number:
Given that the ratio between Laspeyre’s index number and Paasche’s index number is 28 : 27, we can write the equation as:
L / P = 28 / 27
Substituting the values of L and P:
[(10 + 5P) / 35] / [(10 + 2P) / (20 + 5P)] = 28 / 27
Solving the equation:
Cross multiplying the equation:
[(10 + 5P) / 35] × [(20 + 5P) / (10 + 2P)] = 28 / 27
Simplifying the equation:
[(10 + 5P) × (20 + 5P)] /
Community Answer
The ratio between Laspeyre’s index number and Paasche’s Index number i...
ans is 4 but how?
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The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4?
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The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4?.
The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The ratio between Laspeyre’s index number and Paasche’s Index number is 28 : 27. Then the missing figure in the following table P is : Commodity Base Year Current Year Price Quantity Price Quantity X po-L ,qo-10 ,p1-2 ,q1-5 ,po- L ,qo-5, P,q1-2 (a) 7 (b) 4 (c) 3 (d) 9? ans is 4?.
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