BUSINESS STATISTICS – II

Problems on Index Numbers

Simple Aggregative Method

1. From the following data, calculate index number by simple aggregative method.
A B C D
Price in 1990 (Rs) 162 256 257 132
Price in 1991 (Rs) 171 164 189 145

2. From the following data, calculate index numbers by simple aggregative method for the
year 2001.
A B C D E
Price in 2000 (Rs) 150 160 175 190 200
Price in 2001 (Rs) 155 172 170 205 190

3. Find by the Arithmetic Mean Method, the index number from the following data.
Commodity Base Price (Rs) Current Price (Rs)
Rice 30 35
Wheat 22 25
Fish 54 64
Potato 20 25
Coal 15 18

4. Compute a price index for the following by (a) Simple aggregative method and (b)
average of price relative method by using both arithmetic mean and geometric mean.
Commodity A B C D E F
Price in 1971 (Rs) 20 30 10 25 40 50
Price in 1976 (Rs) 25 30 15 35 45 55

5. Calculate index number by using geometric mean.

Commodity Base Year Price Current Year Price
A 2 7
B 4 5
6. Compute a price index by average of price relatives method :
Commodity A B C D E F
Price in 1996 (Rs) 20 30 10 25 40 50
Price in 2000 (Rs) 25 30 15 35 45 55

Weighted Index Numbers

7. From the data given below, construct Laspeyre’s and Paasche’s price index number
with base 1975.
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Commodity 1975 1976

Price Quantity Price Quantity
A 4 2 6 3
B 3 5 2 1
C 8 2 4 6

8. From the following data, calculate Price Index Numbers for 1990 with 1980 as base
by (i) Laspeyres method (ii) Paasche’s method (iii) Fishers Ideal method and
(iv) Marshall Edgeworth method.
Commodity 1980 1990
Price Quantity Price Quantity
A 20 8 40 6
B 50 10 60 5
C 40 15 50 15
D 20 20 20 25

9. Compute Index Numbers from the following data using (i) Laspeyre (ii) Paasche’s
and (iii) Ideal formula.
Commodity Base Year Current Year
Quantity Price Quantity Price
A 12 10 15 12
B 15 7 20 5
C 24 5 20 9
D 5 16 5 14

10. Calculate ‘Fishers Ideal Index from the following data :

Commodity Base Year 1982 Current Year 1987
Price Quantity Price Quantity
A 10 13 14 15
B 15 18 22 24
C 12 15 15 18
D 8 11 10 15
E 6 19 9 19

11. Construct Fishers Ideal Number from the following data :

Item Base Year Current Year
Price Total Expenditure Price Total Expenditure
A 2 40 5 75
B 4 16 8 40
C 1 10 2 24
D 5 25 10 60

12. Calculate Fisher’s Index Number for the following data :

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Commodity A B C D E
Po 12 10 14 16 18
Total Expenditure 600 1000 840 480 720
P1 20 12 15 18 20
Total Expenditure 2400 960 1050 900 800

13. The following figures relate to the prices and quantities of certain commodities.
Construct an index number from the following data for the year 1975 taking 1970 as
base year.
Commodity Quantity Consumed Price (Rs) in 1970 Price (Rs) in 1975
A 50 32 40
B 35 30 42
C 55 16 24
D 45 40 52
E 15 35 42
Use Kelly’s method.

Weighted Average of Price Relatives Method

14. Calculate the index number for the year 1989 with 1980 as base year from the
following data using weighted average of price relatives.
Commodity Weights 1980 prices (Rs) 1989 prices (Rs)
A 22 2.50 6.20
B 48 3.30 4.40
C 17 6.25 12.75
D 13 0.65 0.90

15. The price quotations of four different commodities for 1980 and 1985 are given below.
Calculate the index number for 1985 with 1980 as base by using (I) simple average
of price relatives (ii) weighted average of price relatives.
Commodity Weight 1985 Price 1980 Price
A 5 4.50 2.00
B 7 3.20 2.50
C 6 4.50 3.00
D 2 1.80 1.00

16. Calculate Price Index of the following data by taking 1985 = 100 by weighted average
of relatives method.
Commodities 1985 Price (Rs) 1985 Quantity 1986 Price (Rs)
A 20 2 25
B 10 3 12
C 12 5 18
D 16 4 16
E 5 7 4
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17. The price quotations of 5 commodities are given below. Calculate the Index numbers
for the current year by using (1) Simple Average of Price Relatives method (2)
Weighted Average of Price Relatives method.

Commodities Weights 2003 Prices (Rs) 2002 Prices (Rs)

A 4 8.50 6.75
B 6 12.00 10.00
C 5 6.25 5.00
D 3 5.00 4.50
E 2 4.50 3.00

Quantity Index Numbers

18. Calculate Quantity Index number to the following data as per Kelly method.
Po Qo P1 Q1
10 6 14 8
12 7 15 8
16 9 17 9
13 8 20 7
15 7 19 6

19. Compute by Fishers index formula, the quantity index number from the data given
below :
Commodity Base Year Current Year
Price (Rs) Total Value (Rs) Price (Rs) Total Value (Rs)
A 10 100 8 96
B 16 96 14 98
C 12 36 10 40

20. The following figures relate to the prices and quantities of certain commodities. Using
Kelly’s method, construct an Index number :

Commodity Quantity Consumed Price in 1980 (Rs) Price in 1985 (Rs)

A 50 32 40
B 35 30 42
C 55 16 24
D 45 40 52
E 15 35 42

Tests of Consistency

1. Compute (I) Laspeyres index and (ii) Paasche’s index from the data given below and
test whether they satisfy (I) Time Reversal Test and (ii) Factor Reversal Test.
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Commodity po qo p1 q1
A 5 10 4 12
B 8 6 7 7
C 6 3 5 4

2. Calculate Fishers ideal index using following data and check whether it satisfies Time
Reversal Test.
Commodities 1974 1975
Quantity Price Quantity Price
X 50 32 50 30
Y 35 30 40 25
Z 55 16 50 18

3. Calculate Fishers Index from the following data and show that it satisfies Time and
Factor Reversal Tests.
Commodity 1970 1980
Price Quantity Price Quantity
A 12 100 20 120
B 4 200 5 220
C 8 120 12 140
D 20 60 24 75

4. From the following data, construct Fishers Ideal Index Number and show how it
satisfies the Time Reversal Test and Factor Reversal Test.
Item Base Year Current Year
Price per unit Total Expenditure Price per unit Total Expenditure
1 2 40 5 75
2 4 16 8 40
3 1 10 2 24
4 5 25 10 60

Chain Index Numbers

5. Convert the following fixed base index numbers into chain base index numbers :
Year : 1970 1971 1972 1973 1974 1975
F.B.I. : 376 392 408 380 392 400

6. Construct chain index numbers from the link relatives given below :
Year : 1969 1970 1971 1972 1973
Link Index : 100 105 95 115 102

7. Convert CBI to FBI (chained to 1996) :

Year : 1996 1997 1998 1999 2000
CBI : 100 120 90 100 125
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8. From the chain based index numbers given below, find fixed base index numbers :
Year : 1975 1976 1977 1978 1979
Chain Base Index : 80 110 120 90 140

9. Prepare fixed base index numbers from the chain base index numbers given below :
Year : 1979 1980 1981 1982 1983 1984
Chain Index : 94 104 104 93 103 102

10. Given below are the chain base index numbers, convert them into fixed base index
numbers.
Year : 1998 1999 2000 2001 2002 2003 2004
Chain Index : 110 150 100 125 90 95 125

Base Shifting

11. The following are the index numbers of wholesale prices of a commodity based on 1990.

Year Index Numbers Year Index Numbers

1990 100 1994 210
1991 108 1995 225
1992 120 1996 240
1993 150
Prepare new index numbers taking 1992 as base.

12. Reconstruct the following indices using 1980 as base.

Year : 1976 1977 1978 1979 1980 1981 1982
Index Nos. : 110 130 150 175 180 200 220

Splicing

13. Splice the following two series of index numbers with (I) 1982 as base (ii) 1988 as
base :
Year : 1982 1983 1984 1985 1986 1987 1988
Series A : 125 150 180 200
Series B : 100 105 90 120

14. Given below are two price index series. Splice them on the base 1974 = 100.
Year : 1970 1971 1972 1973 1974 1975
Old Index
(1965 = 100) : 141.5 163.7 158.2 156.8 157.1
New Index
(1974 = 100) : 99.8 100.0 102.3
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15. Splice type following two series of index numbers downwards and upwards and
construct new index numbers with 1999 as base :
Year : 1996 1997 1998 1999 2000 2001 2002
Indes Nos. : 130 160 180 220 110 130 170
100

Cost of Living Index

1. Calculate Cost of Living Index for the following data :

Commodity Price Quantity in
Base Period Current Period Base Period
A 6 8 50
B 2 3 100
C 5 6 60
D 10 12 30

2. Calculate the Cost of Living Index number from the following data :
Item Price
Base Year Current Year Weights
Food 30 47 4
Fuel 8 12 1
Clothing 14 18 3
House Rent 22 15 2
Miscellaneous 25 30 1

3. Construct the consumer price index number for 1986 on the basis of 1980 from the
following data using family budget method.
Items Price in Price in
1980 (Rs) 1986 (Rs) Weights
Food 200 280 30
Rent 100 200 20
Clothing 150 120 20
Fuel & Lighting 50 100 10
Miscellaneous 100 200 20

4. From the data given below, construct a cost of living index number by using family
budget method for 1996 with 1986 as base year :
Commodity : P Q R S T U
Quantity in units
In 1986 : 50 25 10 20 30 40
Price per unit
In 1986 (Rs) : 10 5 8 7 9 6
Price per unit
In 1996 (Rs) : 6 4 3 8 10 12
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5. Construct the Cost of Living Index Number for the following data :

Item Weights Price Relatives

A 55 140
B 30 120
C 12 130
D 3 110

6. Calculate the cost of living index number from the following data :

Group Index Weight

A 360 48
B 220 12
C 230 9
D 160 12
E 190 15

7. Construct Cost of Living Index :

Simple Index : 110 120 240 160 370 400
Weights : 4 3 5 2 1 1

8. Construct the Cost of Living Index Number from the table given below :

Group Index for 1983 Expenditure

Food 550 46 %
Clothing 215 10 %
Fuel & Lighting 220 7%
House Rent 150 12 %
Miscellaneous 275 25 %

9. From the following data, construct Cost of Living Index number :

Item : Food Clothing Education Medicines

Index numbers : 212 189 165 275
Expenditure (%) : 45 30 15 10

10. An enquiry into the budgets of the middle class families in Bombay gave the following
information.

Expenses on :Food 35% Rent 15% Clothing 20% Fuel 10% Miscell 20 %
Price (1965) Rs. : 150 50 100 20 60
Price (1966) Rs. : 174 60 125 25 90
What changes in the cost of living figure of 1966 have taken place as compared to
1965.
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11. The data given below relate to workers in an industrial town :

Group Cost of Living Index Percentage of Expenditure

For 2001 upto 1996 on the items
Food 200 45
Fuel 150 10
Housing 180 20
Clothing 200 10
Other Items 130 15

If the average monthly pay of the workers in 1996 was Rs. 1,000, what should be the
average monthly pay in 2001 in order that the workers may be able to maintain the
same standard of living as that of 1996.

12. During a certain period, the cost of living index goes up from 110 to 200 and the
salary of the worker is also raised from Rs. 325 to Rs. 500. Does the worker really gain,
and if so, how much in real terms ?