# Calculating simple and aggregate price index

Below is information on food items for the years 2000 and 2004. Use this table for problems 27 & 28. Show All Work

2000 2004
Item Price Quantity Price Quantity
Margarine (pound) \$0.81 18 \$0.89 27
Shortening (pound) \$0.84 5 \$0.94 9
Milk (1/2 gallon) \$1.44 70 \$1.43 65
Potato chips \$2.91 27 \$3.07 33

27. Compute a simple price index for each of the four items. Use 2000 as the base period.

28. Compute a simple aggregate price index. Use 2000 as the base period.

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Solution Summary

Solution describes the steps to calculate simple and aggregate price index in the given case.

\$2.19
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Lokesh Jain, MSc

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Active since 2008

BEng (Hons) , Birla Institute of Technology and Science, India
MSc (Hons) , Birla Institute of Technology and Science, India

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