Question

Question 4
The following table gives the prices ($/litre) and quantities (in litres) of Australian per capita consumption of the three alcoholic beverages, beer, wine and spirits for the years 2000 and 2007.

Beverage	P2000	Q2000	P2007	Q2007
Beer	0.39	102.61	0.54	125.84
Wine	1.02	5.10	1.79	8.68
Spirits	4.21	2.07	5.74	2.58

I. Calculate and interpret the Laspeyres Price index for 2007 with 2000 as the base year.
II. Calculate and interpret the Paasche Price index for 2007 with 2000 as the base year.

Answer 1