Index NumbersMCQPYQ May 18Question 3873 of 197
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If ∑P0q0=1360\displaystyle \sum P_0q_0 = 1360, ∑P1q0=1900\displaystyle \sum P_1q_0 = 1900 ∑P0q1=1344\displaystyle \sum P_0q_1 = 1344 ∑P1q1=1880\displaystyle \sum P_1q_1 = 1880 then Laspeyres's Index number is

Options

A0.71\displaystyle 0.71
B1.39\displaystyle 1.39
C1.75\displaystyle 1.75
DNone of these
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Correct Answer

✅ Option b — 1.39\displaystyle 1.39

All Options:

  • A0.71\displaystyle 0.71
  • B1.39\displaystyle 1.39
  • C1.75\displaystyle 1.75
  • DNone of these

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Detailed Solution & Explanation

We are given: ∑P0q0=1360,∑P1q0=1900\sum P_0q_0 = 1360, \quad \sum P_1q_0 = 1900 The **Laspeyres price index** is given by: P01L=∑P1q0∑P0q0×100=19001360×100≈139.71%P_{01}^L = \frac{\sum P_1q_0}{\sum P_0q_0} \times 100 = \frac{1900}{1360} \times 100 \approx 139.71\% If expressed as a ratio (relative to 1 instead of 100): Index Ratio=19001360≈1.397\text{Index Ratio} = \frac{1900}{1360} \approx 1.397 This corresponds to **1.39** (or 139.70% in percentage terms). Hence, **Option B** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Index Number

A statistical device for measuring changes in the magnitude of a group of related variables (like prices or production) over time.

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More Questions from Index Numbers

In price index, when a new commodity is required to be added, which of the following index is used?

Fisher's ideal formula for calculating index number satisfies the ________

Shifted Price Index = Original Price IndexPrice Index of the year on which it has to be shifted×100\displaystyle \frac{\text{Original Price Index}}{\text{Price Index of the year on which it has to be shifted}} \times 100

If Laspeyres's Index Number is 250 and Paasche's Index Number is 160, then Fisher's Index number is

If ∑P0q0=240\displaystyle \sum P_0q_0 = 240, ∑P1q0=480\displaystyle \sum P_1q_0 = 480, ∑P0q1=600\displaystyle \sum P_0q_1 = 600 and ∑P1q1=192\displaystyle \sum P_1q_1 = 192, then Laspeyres's Index Number is

If ΣPnqn=249\displaystyle \Sigma P_n q_n = 249, ΣP0q0=150\displaystyle \Sigma P_0 q_0 = 150, ΣPnq0=145\displaystyle \Sigma P_n q_0 = 145 and Paasche's Index Number = 150, then Fisher's Ideal Price Index Number is

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