Tag: business mathematics and statistics

Questions Related to business mathematics and statistics

For consumer price index, price quotations are collected from:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Fair price shops

  2. Government depots

  3. Retailers

  4. Whole-sale dealers

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  For consumer price index, price quatations are collected from: $Retailers.$

$\Rightarrow$   A retailer is a company that buys products from a manufacturer or wholesaler and sells them to end users or customers. In a sense, a retailer is an intermediary or middleman that customers use to get products from the manufacturers.
$\Rightarrow$  Retailers are experts in marketing, sales, merchandise inventory, and knowing their customers. They purchase the goods from the manufacturers at cost and market them to consumers at retail prices. 
$\Rightarrow$  The retail price can be anywhere from 10 percent to 50 percent higher than the manufacturer cost. 

When the prices of rice are to be compared, we compute: 

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Volume index

  2. Value index

  3. Price index

  4. Aggregative index

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  When the prices of rice are to be compared, we compute: $Price\,Index.$

$\Rightarrow$  Price index, measure of relative price changes, consisting of a series of numbers arranged so that a comparison between the values for any two periods or places will show the average change in prices between periods or the average difference in prices between places. 
$\Rightarrow$  In most countries price indexes are used to measure inflation, each focusing on the prices of a collection of goods and services important to a particular segment of the economy.

Price relatives computed by chain base method are called: 

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Price relatives

  2. Chain indices

  3. Link relatives

  4. None of them

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  Price relatives computed by chain base method are called $Link\,\,relatives.$

$\Rightarrow$  Under this method, the base year’s price does not remain fixed but moves step from year to year. In other words, the immediately preceding year’s price becomes the base year’s price for each of the succeeding years.
$\Rightarrow$  Under this method, the base year’s price does not remain fixed but moves step from year to year. In other words, the immediately preceding year’s price becomes the base year’s price for each of the succeeding years.

$\Rightarrow$  $Chain\, index$ = $\dfrac{Average\, link\, relative\, of\, current\, year \times Chain\, index\, of\, previous\, year}{100}$

Another name of consumer's price index number is:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Whole-sale price index number

  2. Cost of living index

  3. Sensitive

  4. Composite

Show answer
Correct Option: B
Explanation:

$\Rightarrow$  Another name of consumer's price index number is ; $Cost\,of\,living\,index.$

$\Rightarrow$  A cost-of-living index is a theoretical price index that measures relative cost of living over time or regions. 
$\Rightarrow$  It is an index that measures differences in the price of goods and services, and allows for substitutions with other items as prices vary.
$\Rightarrow$  Cost of living indexes are meant to compare the expenses an average person can expect to incur to acquire food, shelter, transportation, energy, clothing, education, healthcare, child care and entertainment in different regions.

Consumer price index are obtained by:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. Paasche's formula

  2. Fisher's ideal formula

  3. Marshall Edgeworth formula

  4. Family budget method formula

Show answer
Correct Option: D
Explanation:

$\Rightarrow$  Consumer price index are obtained by: $Family\,\,budget\,\,method\,\,formula.$

$\Rightarrow$  In this method, the family budgets of a large number of people are carefully studied and the aggregate expenditure of the average family for various items is estimated. 
$\Rightarrow$  These values are used as weights. The current year’s prices are converted into price relatives on the basis of the base year’s prices, and these price relatives are multiplied by the respective values of the commodities in the base year. The total of these products is divided by the sum of the weights and the resulting figure is the required index numbers.
$P _{0n}=\dfrac{\sum WI}{\sum W}$   Here, $I=\dfrac{P _n}{P _0}\times 100$  and $W=P _0q _0$

Example of non dense index is

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. ternary index.

  2. secondary index.

  3. primary index.

  4. clustering index.

Show answer
Correct Option: D
Explanation:

Clustering index is an example of non dense index.

Index which has an entry for some of key value is classified as:

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. linear index.

  2. dense index.

  3. non dense index.

  4. cluster index.

Show answer
Correct Option: C
Explanation:

Index which has an entry for some of key value is classified as non dense index.

In multilevel indexes, primary index created for its first level is classified as

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. zero level of multilevel index.

  2. third level of multilevel index.

  3. second level of multilevel index.

  4. first level of multilevel index.

Show answer
Correct Option: C
Explanation:

In multilevel indexes, primary index is created for its first level  is classified as second level of multilevel index.

Construct the index number for 1991 taking 1990 as the base year from the following data by simple average of price relative method.

Commodity A B C D E
Price in 1990 100 80 160 220 40
Price in1991 140 120 180 240 40
business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. 122.32

  2. 130.14

  3. 114.56

  4. 124.53

Show answer
Correct Option: A
Explanation:
 $Commodity$ $Price\,in\,1991$$P _0$  $Price\,in\,1991$$P _1$  $Price\,relative$$\dfrac{P _1}{P _0}\times 100$ 
 $A$ $100$  $140$  $140$ 
$B$  $80$  $120$  $150$
$C$  $160$  $180$  $112.5$
$D$  $220$  $240$  $109.09$
$E$  $40$  $40$  $100$ 
 $Total$     $611.59$

$\therefore$   By using simple average of price relative method,

$\Rightarrow$   $P _{01}=\dfrac{\sum P _{01}}{N}=\dfrac{611.59}{5}=122.32$

The current price of a soap is Rs 11.  The base price is 3, find price relative.

business mathematics and statistics introduction to index number introduction to index numbers index numbers applied statistics

  1. $2.7$

  2. $2.5$

  3. $3.6$

  4. None of the above

Show answer
Correct Option: C
Explanation:

$\Rightarrow$   Current price of soap is $Rs.11.$

$\Rightarrow$   Base price of soap is $Rs.3$
$\Rightarrow$   $Price\, relative$ = $\dfrac{Current\,price}{Base\,price}=\dfrac{11}{3}=3.6$