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A role of the NSW Department of Social Services is to monitor the cost of goods and services in the state. Recent reports reveal that
A role of the NSW Department of Social Services is to monitor the cost of goods and services in the state. Recent reports reveal that the price of commonly purchased supermarket items has doubled over the past ten years, and this is a concern for the department. In June 2015 the department nvestigated the findings of the report by regularly sending officials out to a typical supermarket in their area. The officials are asked to purchase a basket of food whose items that are commonly bought - these include eggs (by the dozen), milk (two litre bottle), bread (by the load), and potatoes (by the kilogram). The following information summarises the average yearly price of each item in the basket and the quantity typically bought (per year) for the years 2005 and 2015. Quantity Price 2005 2015 2005 2015 Eggs (dozen) 45 35 2.35 4.20 Milk (2L) 50 48 1.50 2.48 Bread (loaf) 50 50 0.92 1.98 Potatoes (kg) 48 50 4.21 7.26 a) Calculate a simple aggregate price index for 2015, taking 2005 as the base year. Calculate the Paasche price index for 2015, taking 2005 as the base year
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