ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A random sample of 100 households has been selected in order to establish a price
index for housing utilities. The following average annual figures have been obtained.
Housing
Utilities
2017
Electricity 1,97
Gas
7,90
0,29
2,40
Telephone
Water
Price(Rand/Unit)
2018
2,05
8,25
0,30
2,45
2019
2,09
8,60
0,31
2,50
2017
62
9
296
55
Quantities
2018
64
9
297
56
2019
68
10
298
58
.
a) Find the price relative for Electricity, using (2017= 100). Interpret.
b) Find the quantity relative for Water, using (2018= 100). Interpret.
c) Calculate the Laspeyre's price index for 2019, using 2017 = 100. What is the
percentage increase in 2019 price over those in 2017? Interpret.
d) Calculate the Paasche's price index for 2018, using 2017 = 100. What is the
percentage increase in 2018 price over those in 2017? Interpret.
e) By how much has this households utility in these four utilities changed between
2017 and 2019? Assume price are held constant at base year 2017.
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Transcribed Image Text:A random sample of 100 households has been selected in order to establish a price index for housing utilities. The following average annual figures have been obtained. Housing Utilities 2017 Electricity 1,97 Gas 7,90 0,29 2,40 Telephone Water Price(Rand/Unit) 2018 2,05 8,25 0,30 2,45 2019 2,09 8,60 0,31 2,50 2017 62 9 296 55 Quantities 2018 64 9 297 56 2019 68 10 298 58 . a) Find the price relative for Electricity, using (2017= 100). Interpret. b) Find the quantity relative for Water, using (2018= 100). Interpret. c) Calculate the Laspeyre's price index for 2019, using 2017 = 100. What is the percentage increase in 2019 price over those in 2017? Interpret. d) Calculate the Paasche's price index for 2018, using 2017 = 100. What is the percentage increase in 2018 price over those in 2017? Interpret. e) By how much has this households utility in these four utilities changed between 2017 and 2019? Assume price are held constant at base year 2017.
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