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Zzainab7y ago
Q. product M uses four different types of materials. The materials used and their prices, in 2006 and 2007 , are as follows. 2006: material A :200 kg 0.98 $per kg material B: 500 kg 0.95 $per kg material C: 300 kg 1.20 $per kg material D: 400 kg 1.10 $ per kg 2007: material A :300 kg 1.40 $per kg material B: 400 kg 1.10 $per kg material C: 500 kg 0.92 $per kg material D: 100 kg 1.14 $ per kg calculate the Lyspere quantity index for 2007 (with 2006 as the base year ) to two decimal places. The answer is: Lyspere method = 100* (1384/1471) =94.09. So,why we don't use base year quantities to calculate prices for year 2007?
John MoffatJohn MoffatTutor7y ago#1
The question asks for the quantity index, not for the price index. Therefore you compare 2006 quantities at 2006 prices, with 2007 quantities at 2006 prices.
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