Question

Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period.

Seafood	2000 Qty. (lb)	2000 Price ($/lb)	2009 Price ($/lb)
Halibut	75,090	2.01	2.43
Lobster	83,280	3.72	3.09
Tuna	50,779	1.87	1.97

(a)

Compute the index number (price relative) for each type of seafood. (Round your answers to one decimal place.)

Seafood	Price Relative
Halibut
Lobster
Tuna

(b)

Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.)

I₂₀₀₉ =

Comment on the change in seafood prices over the nine-year period. (Enter your percentage as a positive value. Round your answer to one decimal place.)

Seafood prices have

by % over the 9-year period according to the index.

Answer 1

Answer:

a) Price Relative (calculated as 2009 price / 2000 price multiplied by 100):

Halibut: (2.43 / 2.01)*100 = 120.9

Lobster: (3.09 / 3.72) * 100 = 83.1

Tuna: (1.97 / 1.87) * 100 = 105.3

b) The weightage/proportion of qty of each type of seafood is shown in column 3 below:

Seafood	2000 Qty (lb)	Wtd Qty	2000 Price ($/lb)	2009 Price ($/lb)
Halibut	75290	0.360	2.01	2.23
Lobster	83280	0.398	3.72	3.09
Tuna	50779	0.243	1.87	1.97

Now, Wtd average price index,

I₂₀₀₉ = Sum(Wtd Qty * 2009 Price) = 2.6

Similarly, I₂₀₀₀ = Sum(Wtd Qty * 2000 Price) = 2.7

Hence, change in seafood prices from 2000 to 2009 = ( I₂₀₀₉ - I₂₀₀₀ ) / I₂₀₀₀ = 0.04

Hence, seafood prices have decreased by 4% over the 9-year period according to the index.