Statistical Methods and Hypothesis Testing in Economic and Production AnalysisQuestion 1[4 marks]Consider the following information.20002003ItemPriceQuantityPriceQuantityA$ .25210$ .37210B.8721.152C10.00415.004D.3535.6035a.Compute the Laspeyres index.Ans:= (0.37 x 210 + 1.15 x 2 + 15 x 4 + 0.60 + 35)/(0.25 x 210 + 0.87x 2 + 10 x 4 + 0.35 x 35)= 161/106.49 = 1.512=151.188%151.188%b.Compute the Paasche index.Ans:(0.37 x 210 + 1.15 x 2 + 15 x 4 + 0.60 + 35)/(0.25 x 210 + 0.87x 2 + 10 x 4 + 0.35 x 35) = 1.512151.188%c.Comment on your answers for Parts c and d.Ans:They are the same since quantity is the same for both years.Preview Mode
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