# Applied Statistics-Index Numbers (ISS (Statistical Services) Statistics Paper III): Questions 18 - 25 of 25

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## Question number: 18

» Applied Statistics » Index Numbers » Income Distribution-Pareto and Engel Curves

Appeared in Year: 2012

### Write in Short

Discuss Engel’s law and Engel’s curve. Explain Engel ’s curve for constant price.

## Question number: 19

» Applied Statistics » Index Numbers » Laspeyre

Appeared in Year: 2013

### Describe in Detail

Why do the errors occur in the measurement of price and quantity index numbers? Give the names of those errors.

### Explanation

**Errors in the measurement of price and quantity index numbers: **

Generally, index numbers for prices are constructed from *m* commodities, which are common to both the base year and the given year. But in practical calculations, it may not be possible to consider all common commodities say, M.

Therefore, value index can be either in terms of

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## Question number: 20

» Applied Statistics » Index Numbers » Price Relatives and Quantity or Volume Relatives

Appeared in Year: 2013

### Describe in Detail

Explain the following:

(i) Weighted Aggregates method

(ii) Criteria of a good index number

### Explanation

** (i) Weighted Aggregates Method: **

In this method, an index number of prices for any given year is calculated after assigning the appropriate weights to the different items included in that index number.

Usually weights are assigned on the basis of quantities, values or sale price of the commodities consumed during the base year or in some typical

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## Question number: 21

» Applied Statistics » Index Numbers » Income Distribution-Pareto and Engel Curves

Appeared in Year: 2012

### Write in Short

Using curves of concentration, discuss the formulation of the problem of distribution of income.

## Question number: 22

» Applied Statistics » Index Numbers » Demand Analysis

Appeared in Year: 2014

### Describe in Detail

Define price elasticity of demand and income elasticity of demand. Point out their uses in economic analysis.

### Explanation

**Price elasticity of demand: **

Price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.

Price elasticity of demand shows the sensitiveness or responsiveness of demand to the change in price.

Price elasticity of demand is defined as the value of the ratio o

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## Question number: 23

» Applied Statistics » Index Numbers » Laspeyre

Appeared in Year: 2014

### Describe in Detail

Define Laspeyres’ and Paasche’s index numbers. It is sometimes stated that Laspeyres’ price index number tends to overestimate price changes while Paasche’s price index number tends to underestimate them. Justify or refute the above statement giving reasons.

### Explanation

**Laspeyre’s Index Number: **

Laspeyre’s index number is a index number where the base year quantities are taken as weights. Under this method, we get the weighted index on the basis of aggregative expenditure, assuming that the quantities consumed in the base year are also the quantities consumed in the current year.

where

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## Question number: 24

» Applied Statistics » Index Numbers » Price Relatives and Quantity or Volume Relatives

Appeared in Year: 2014

### Describe in Detail

Discuss how you will proceed for constructing a cost of living index number for a given expenditure group in a city.

### Explanation

**Steps involved in the construction of cost of living index number. **

**i) Scope and coverage**: Since it is always constructed for a particular community, first step is to specify the particular class of people for which the index number is going to be constructed. such class may be industrial workers of a particular locality, government employees of a

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## Question number: 25

» Applied Statistics » Index Numbers » Fisher Index Numbers: Chain Base Index Number & Tests for Index Number

Appeared in Year: 2014

### Describe in Detail

Define Fisher index number. Show why Fisher index number is said to be ideal index number. Also, show why Laspeyres’ and Paasche’s index number are not ideal one.

### Explanation

Fisher’s index number:

Fisher’s index number is the geometric mean of laspeyer’s and Paasche’s index number. This index number uses bith base and current year quantities as weights. It counter balances the effect of upward and downward bias experienced with the method os Laspeyer’s and Paasche’s by taking into account both the current year’s and

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