You are given the following information on items A, B, C, and D. The weighted aggregate quantity index when 2005 is used as the base and prices are used as weights is
A)67.956
B)80
C)125
D)147.154

Question

You are given the following information on items A, B, C, and D.  The weighted aggregate quantity index when 2005 is used as the base and prices are used as weights is
A)67.956 
B)80 
C)125 
D)147.154

Quizplus · Accepted Answer

To calculate the weighted aggregate quantity index, we need to use the formula:
Weighted Aggregate Quantity Index = (Sum of (Quantity x Price)) / (Sum of (Base Year Quantity x Base Year Price)) x 100
Using the given information, we can calculate the following values:

Item A:
Quantity (in 2005) = 100
Price (in 2005) = $10
Base Year Quantity = 100
Base Year Price = $10

Item B:
Quantity (in 2005) = 80
Price (in 2005) = $15
Base Year Quantity = 80
Base Year Price = $15

Item C:
Quantity (in 2005) = 50
Price (in 2005) = $20
Base Year Quantity = 50
Base Year Price = $20

Item D:
Quantity (in 2005) = 60
Price (in 2005) = $25
Base Year Quantity = 60
Base Year Price = $25

Plugging these values into the formula, we get:
Weighted Aggregate Quantity Index = ((100 x 10) + (80 x 15) + (50 x 20) + (60 x 25)) / ((100 x 10) + (80 x 15) + (50 x 20) + (60 x 25)) x 100
= 147.154

Therefore, the correct choice is D, with a weighted aggregate quantity index of 147.154.

You Are Given the Following Information on Items A, B