# STA304 Assignment 1 Solution 2021 - VU Answer

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STA304 ASSIGNMENT 1 SOLUTION FALL 2021

Question 1:

Given the prices of three commodities, Using 1990 as the base period, compute, simple average of relatives price indices using

1. A.M

2. Median

 Year Prices A B C 1990 30.00 12.00 20.00 1991 30.50 13.50 23.50 1992 32.50 14.50 25.00 1993 32.50 14.00 25.00

Solution:

 Year Prices Total Mean Median A B C 1990 100 100 100 300 100 100 1991 102 113 118 332 111 113 1992 108 121 125 354 118 121 1993 108 117 125 350 117 117

Question 2:

Construct the following weighted aggregative price index numbers (by using Paasche’s formula) for 1960 by using 1956 as a base period.

 Commodity Prices1956        1956 Quantities1956        1960 A 600 1200 100 150 B 400 700 80 100 C 180 432 60 72 D 450 363 30 33

Solution:

 Commodity Prices Quantities P1Q1 P0Q1 1956 (Po) 1960 (P1) 1956 (Qo) 1960 (Q1) A 600 1200 100 150 180000 90000 B 400 700 80 100 70000 40000 C 180 432 60 72 31104 12960 D 450 363 30 33 11979 14850 293083 157810

Index for 1960