SECTION D Use the information provided below to answer questions 16 to 20. A business analyst has obtained the following information (Table 4) on the prices (in Rands) and quantities (in boxes) of three flavours of ice-cream sold by a small business owner during 2016 and 2021. 2016 Ice-cream flavours A 135.60 B 66.73 C 138.44 D 149.86 Vanilla Chocolate Strawberry Table 4: Prices and quantities of three different flavours of ice-cream. Question 16 Using 2016 as the base year, calculate the Laspeyre's Price Index for 2021. Question 17 A 287.54 B 48.15 C 72.15 D 207.70 Question 17 Question 18 Price (Rands per box) 130 Using 2016 as the base year, calculate the Paasche's Quantity Index for 2021. Question 19 Quantity (boxes) 44 000 21 500 15 900 140 145 Using 2016 as the base year, calculate the Paasche's Quantity Index for 2021. A 287.54 B 48.15 C 72.15 D 207.70 Using 2016 as the base year, calculate the Pasche's Price Index for 2021. A 149.86 B 138.60 C 207.70 D 66.73 A 138.60 B 207.47 C 72.15 D 149.86 Price (Rands per box) 170 200 220 Question 20 Using 2016 as the base year, calculate the Laspeyre's Quantity Index for 2021. [20 MARKS] 2021 Quantity (boxes) 92 000 40 200 36 600 (4 marks) (4 marks) 4 marks) (4 marks) (4 marks) (4 marks) In general, consumers are price-takers; thus, they are expected to react to price changes by substituting ice-cream flavours that have become relatively cheaper for those that have become relatively more expensive. This phenomenon is consistent with the substitution effect. Substitution tends to cause a negative correlation between the price and quantity relatives. With regard to the observation above, and the indices calculated above, which of the following is false? A The transaction data on the ice-cream sales is not indicative of substitution effect. B The Paasche's indices are relatively greater than the Laspeyre's indices. C The price and quantity relatives of the ice-cream data are positively correlated. D The price and quantity relatives of the ice-cream data are negatively correlated