Quantitative Methods 1 Assignment 5 For Full marks you must show detailed calculations for your answers. Question 1: In January 2001 the price for a whole fresh chicken was $1.99 per kilogram. In September 2011 the price for the same chicken was $5.49. Use the January 2001 price as the base period and 100 as the base value to develop a simple index. By what percent has the cost of chicken increased during the 10-year period? Question 2: Following are the quantities and prices of office supplies for the years 2001 and 2011 for Sam's Student Centre. 1. Determine the simple price indexes. 2. Determine the simple aggregate price indexes for the two years. 3. Determine Laspeyres's price index. 4. Determine Paasche's price index 5. Determine Fisher's ideal index. Question 2: Following are the quantities and prices of office supplies for the years 2001 and 2011 for Sam's Student Centre. 1. Determine the simple price indexes. 2. Determine the simple aggregate price indexes for the two years. 3. Determine Laspeyres's price index. 4. Determine Paasche's price index 5. Determine Fisher's ideal index. 2001 2011 Item Price ($) Quantity Price ($) Quantity Pens (dozen) $0.90 50 $1.10 55 Pencils (dozen) 0.65 50 0.80 8 60 Erasers (each) 0.45 250 0.55 275 Paper, lined (pkg) 0.89 500 1.09 750 Paper, printer (pkg) 5.99 300 4.99 450 Printer (cartridges) 15.99 150 19.99 200 Question 3: The Johnson Wholesale Company manufactures a variety of products. The prices and quantities produced for April 2001 and April 2011 are: Product Small motor (each) 2001 Price ($) 2001 Quantity 2011 2011 Quantity $23.60 Scrubbing compound (litre) 2.96 Produced 1760 86 450 Nails (pound) 0.40 9460 Price ($) $28.80 3.08 0.48 Produced 4259 62 949 22 370 Using April 2001 as the base period, find the index of the value of goods produced for April 2011. Question 4: Sam Steward is a freelance Web page designer. Listed below are his yearly wages for the years 2006 through 2011. Also included is an industry index for computer programmers that reports the rate of wage inflation in the industry. This index has a base of 1995. Year Wage ($ thousands) Index (1995 = 100) 2006 $175 148.3 2007 175 140.6 2008 150 120.9 2009 120 110.2 2010 2011 120 130 105.3 105.0 Compute Sam's real income for the period. Did his wages match the increase/decline in the industry? Question 5: The following table gives information on the Consumer Price Index and the monthly take-home pay of Bill Martin, an employee at the Jeep Corporation. (2002 = 100) ITT Consumer Price Index Year Mr. Martin's Monthly Take-Home Pay 2002 2007 2010 100.0 111.5 116.5 $2400 2800 2900 1. What is the purchasing power of the dollar for 2007 based on the period 2002? 2. Determine Mr. Martin's "real" monthly income for 2007. 3. What is the purchasing power of the dollar for 2010 based on the period 2002? 4. Determine Mr. Martin's "real" monthly income for 2010.