Calculation of Laspeyres Index

The Laspeyres Index is a measure used to compare the change in prices of a basket of goods and services over time. It is calculated by comparing the total expenditure in the base year to the total expenditure in the current year.

To calculate the Laspeyres Index, we need the following information:
1. ∑P0Q0: Total expenditure in the base year at base year prices.
2. ∑PnQ0: Total expenditure in the current year at base year prices.
3. ∑P0Qn: Total expenditure in the base year at current year prices.
4. ∑PnQn: Total expenditure in the current year at current year prices.

Step 1: Calculate the base year price index (Laspeyres Price Index)
The base year price index compares the total expenditure in the current year at base year prices to the total expenditure in the base year at base year prices.

Laspeyres Price Index = (∑PnQ0 / ∑P0Q0) * 100

Given that ∑P0Q0 = 1360 and ∑PnQ0 = 1900, we can calculate the base year price index as follows:
Laspeyres Price Index = (1900 / 1360) * 100
Laspeyres Price Index = 139.71

Step 2: Calculate the current year quantity index (Laspeyres Quantity Index)
The current year quantity index compares the total expenditure in the base year at current year prices to the total expenditure in the current year at current year prices.

Laspeyres Quantity Index = (∑P0Qn / ∑PnQn) * 100

Given that ∑P0Qn = 1344 and ∑PnQn = 1880, we can calculate the current year quantity index as follows:
Laspeyres Quantity Index = (1344 / 1880) * 100
Laspeyres Quantity Index = 71.49

Step 3: Calculate the Laspeyres Index
The Laspeyres Index is calculated by multiplying the base year price index with the current year quantity index.

Laspeyres Index = Laspeyres Price Index * Laspeyres Quantity Index

Laspeyres Index = 139.71 * 71.49
Laspeyres Index = 9988.92

Therefore, the Laspeyres Index number is 9988.92.