INDEX NUMBER : EXERCISE 1

The following table contains information on quantities and prices of items sold at Flaxi
Bookstore for the year 2002 and 2003.


Items Quantity Unit
Price
Quantity Unit
Price
2002 2002 2003 2003
Comics 570 3.50 650 3.80
Magazine 830 5.50 980 5.80
Stationery 450 2.80 540 3.00

Using 2003 as the current year

i. Calculate the Laspeyres price index and explain its meaning.

ii. Calculate the Paasche quantity index and explain its meaning.

(OCT 2004)