# Index Number related question...

• Jun 5th 2013, 09:43 PM
ystiang
Index Number related question...
The sale values (output quantity multiplied by price) for four types of product of a company at current price and 1998 price arc as follows:

 (RM million) Sale value at current price Sale value at 1998 price Type of product 1998 2009 2010 2009 2010 A 50 120 175 100 125 B 10 30 24 25 20 C 40 40 50 20 20 D 20 50 90 40 60 Total 120 240 339 185 225

Calculate:

(a) the Laspeyres quantity index for the year 2010 by using 1998 as the base year, [2 marks]

(b) the Laspeyres quantity index for the year 2010 by using 2009 as the base year, [3 marks]

(c) the percentage change in the output quantity of the company from 2009 to 2010. [1 marks]

Just in case you want to know, this is one of the question of STPM Maths S 2011.

(a) 225/120 * 100 = 187.5

(b) No clue at all...

(c) Since (c) is related to (b)...
• Jun 5th 2013, 09:55 PM
chiro
Re: Index Number related question...
Hey ystiang.

What is the definition for the Laspeyres quantity index?
• Jun 5th 2013, 11:04 PM
ystiang
Re: Index Number related question...
Quote:

Originally Posted by chiro
Hey ystiang.

What is the definition for the Laspeyres quantity index?

Laspeyres quantity index: Lq = (q_n p_0)/(q_0 p_0 )×100

where,
q_n : quantity in current period
q_0 : quantity in base period
p_0 : price in base period

But the question twisted like... ._.
• Jun 5th 2013, 11:56 PM
chiro
Re: Index Number related question...
You have two p_0 terms: is one of them meant to be different or should they be cancelled out?
• Jun 6th 2013, 12:12 AM
ystiang
Re: Index Number related question...
Quote:

Originally Posted by chiro
You have two p_0 terms: is one of them meant to be different or should they be cancelled out?

Oops, sorry I forgot the sum... Should be Lq = ∑(q_n p_0)/∑(q_0 p_0 )×100
• Jun 6th 2013, 03:14 AM
chiro
Re: Index Number related question...
So given your formula, you have the p_x*q_x as 120 30 40 50. Remember that the total sales is the cost_per_item * number of items.
• Jun 6th 2013, 09:17 AM
ystiang
Re: Index Number related question...
No, it's sum of, (q_n p_0)/(q_0 p_0 )×100,
you can't simplify p_0...

Usually Index Numbers' question directly give the price and quantity of current and base period...
We just need to remember the formula and apply them, BUT this question twisted seriously...
• Jun 6th 2013, 05:17 PM
chiro
Re: Index Number related question...
Isn't q_0 * p_0 just the sales volume for base-line?