Question

n 1 answered out of 1.00 question Data for selected fruits purchased at wholesale prices for 2005 and 2009 are shown next. 2005 2009 Price Quantity Price Quantity Red Delicious Apples (Ib.) 0.971 1000 1.114 2000 Navel Orange (lb.) 0.885 300 0.932 400 Bananas (lb.) 0.482 400 0.571 400 Tomatoes (Ib.) 1.848 200 1.961 200 What is the interpretation of the value index? Select one: a. Value rose 79.08%. b. Value rose 12.7%. c. Value decreased 12.7% d. Value rose 9.4%. e. Value decreased 79.08%.

Answer 1

Ques 1 Red Delicious Apple Nevel Orange Bananas Tomatoes 2005 Price Quantity 0.971 1000 0.885 300 0.482 400 1.848 200 2009 Price Quantity 1.114 2000 0.932 400 0.571 400 1.961 2007 To Make it comparable, let's consider quantities in 2005 same as 2009 (Paasche's Method) Red Delicious Apple Nevel Orange Bananas Tomatoes Price 0.971 0.885 0.482 1.848 2005 Quantity Product 2000 1942 400 354 400 192.8 200 369.6 2858.4 Price 1.114 0.932 0.571 1.961 2009 Quantity Product 2000 2228 400 372.8 400 228.4 200 392.2 3221.4 Value rose by =(Value of 2009 - Value of 2005)/Value of 2005 12.70% (Option B) Ques 2 Consumer Price Index rose by 59.3% (159.3-100)/100) (Option A)