i. Etienne Laspeyres developed a method in the latter part of the 19^thcentury to determine a weighted index using base-period weights. ii. If we are constructing a weighted index of the price of food for 2000 using the Laspeyres' method and 1982-84 = 100, we use the amounts consumed in the base period, q₀, as weights. iii. The Laspeyres' method changes in buying patterns over time. A) (i), (ii), and (iii) are all correct statements. B) (i) and (ii) are correct statements but not (iii). C) (i) and (iii) are correct statements but not (ii). D) (ii) and (iii) are correct statements but not (i). E) (i), (ii), and (iii) are all false statements.

Question

Quizplus · Accepted Answer

Statement (i) is correct as Etienne Laspeyres did develop a method in the 19th century to determine a weighted index using base-period weights. Statement (ii) is correct as Laspeyres' method uses base-period weights, which in this case are the amounts consumed in the base period of 1982-84. Statement (iii) is not correct as the Laspeyres' method does not account for changes in buying patterns over time, which is a limitation of the method.

I Etienne Laspeyres Developed a Method in the Latter Part