A simple index number Index numbers is a number that expresses the relative change in price, quantity, or value from one period to another (1). Price index number = cost of basket in current period x 100 cost of basket in base period An index number provides a quantitative description of change over time - how much increase? How much decrease? Market researchers are also using index numbers are also using index numbers to compare a research result with an overall norm, to measure how the investment, specially in advertising industry, are working. How changes in these figures are related to the current economy as advertising is promoted as an engine that drives the economy rather than a supplement? 2. A composite index 2.1 Laspeyres Price Index The most commonly used weighted price index is the Laspeyres Price Index named after its inventor. It is a weighted aggregate price index that uses the quantities in the base period/ year as weights (Harper, 1991,p215). In essence, Laspeyres price index for the year measured shows the extent of price changes since base year on the assumption that the expenditure pattern was the same in the year measured as in base year. Thus, only price is allowed to change and the index for the current period reflects this price. 2.2 Paasche Price Index Another weighted price index is the Paasche Price Index, which uses the current quantity weights and adjusts the base each time a new period is considered. It is a weighted aggregate price index that uses the quantities in the current year as the weights (Harper, 1991,p215). Paasche price index shows the changes assuming the expenditure pattern was the same in base year as in the year measured. 2.3 Advantages and Limitations Both the Laspeyres index and the Paasche index have advantages and limitations, as indicated following: 2.3.1 Advantages Laspeyres index · Easy to calculate. · The Laspeyres index is the more convenient to use on a continuing basis, because the weights of base year remain fixed. · It can be easier and cheaper to produce since the only quantities required are for the base period. · Laspeyres where the same base weights can be used for a number of periods making it less demanding of data. As the weights don't change period to period (fixed basket) it can be considered to show exclusively price (or quantity) change (1). Paasche index ------------- · Uses quantities from the current period, thus reflects current buying habits 2.3.2 Limitations Laspeyres index · It cannot be used if quantities are unobtainable. · Laspeyres, as time moves on the fixed basket becomes less relevant. Paasche index · There can be a mass of statistical data requirement, as Paasche
The following assignment shows the progress I have made throughout unit EDC141: The Numerate Educator. Included are results from the first and second round of the Mathematics Competency Test (MCT). Examples from assessment two, which, involved me to complete sample questions from the year nine NAPLAN. I was also required to complete a variety of ‘thinking time problems’ (TTP’s) and ‘what I know about’ (WIKA’s). These activities allowed me to build on my knowledge and assisted me to develop my mathematical skills. The Australian Curriculum has six areas of mathematics, which I used in many different learning activities throughout this study period (Commonwealth of Australia, 2009). These six areas will be covered and include number, algebra,
The effect of the price change is then analyzed by comparing the baseline scenario (without the price change) with the alternative scenario that includes the price change while keeping all other parameters constant (ceteris paribus).
The Mc Donald Big Mac index, also known as the Big Mac Purchasing Power Parity (PPP) is a periodic survey done by “The Economist” magazine. This index measures the Purchasing Power Parity between nations using the international prices of the burger as a benchmark (R.L.W., 2014). The index draws its rationality from the concept of “the law if one price”, which infers that in the long-run, all goods must sell for the same price in all locations. This law constitutes the bases of the Purchasing Power Parity theory, which is derived from no arbitrage postulation.
A monthly release from the Bureau of Labor Statistics (BLS), the PPI shows trends within wholesale markets, manufacturing industries, and commodity markets. All industries that produce physical goods that make up the economy of the United States. They are included, but not imports. Taking into consideration, the PPI measures the purchases of goods and services completed by urban households, the average changes over time in the sale prices received by domestic producers, and the sales at all production levels for producers in the United States. This includes sales of unfinished products used throughout the production and production chain. The PPI can serve as a principal indicator of definitive price changes at the consumer level, and of inflation if the trend in the PPI is higher. Low inflation is good for stimulating consumer spending, corporate profits and, ultimately, the stock market. The rise in inflation can be a sign of an overheated economy and potentially higher interest rates. On the other hand, the PPI can give analysts, business executives, and investors with information on price trends at various stages of the production process. This is useful for companies in making capital investment decisions, for analysts in tracking economic trends and for investors looking for clues about future inflation. Also, the PPI can offer analysts, business executives, and
The average prices of the goods and services in the Gross Domestic Product (GDP) in the current year expressed in percentage of the based-year prices is called the Gross Domestic Product (GDP) Deflator, measured the price level. To analyse the impact of price variations in an economy, the Gross Domestic Product (GDP) Deflator would be the ideal price index as it reflect changes in consumption configurations and the outline of new goods and services.
This past semester I was overly ambitious to a fault, and ended up taking a class that I was not prepared for. This course, Math 0235, is the Honors College advanced course that teaches Calculus 1 and 2, done in proofs. In high school, I took Calculus 1 so I thought I would be prepared for this class, but I was a little in over my head to say the least. While I believe I should have dropped/withdrawn from the class as that would have significantly helped my GPA, I do not regret taking the course as it taught me a lot and I thoroughly enjoyed learning the topic. My final grade in Math 0235 was a C+, which may look low but was a shining victory as I went from failing the first exam to getting a B+ on the last one (four points shy from an A). Despite having such a low final grade, I am happy to have taken the class and learned all that I did, and to see myself prevail in such a way that there was such a large difference has really inspired me for future
Arcading to Michael Hollihan (1982) Relative price are supposed to reflect real forces such as changes in tastes and technology, while the changes in the aggregate price level would reflect monetary changes since price is
Elasticity is one of the most important theories in economics and it is a measure of responsiveness (Baker, 2006)i. There are mainly two types of elasticity, the elasticity of demand which includes price elasticity of demand, income elasticity of demand, and cross elasticity of demand as well as elasticity of supply (McConnell, Brue, & Flynn, 2009)ii. The degree to which a demand or supply curve reacts to a change in price is the curve's elasticity (Lingham, 2009)iii. Elasticity varies among products because some products may be more essential to the consumer.
In school, I learned about the Holocaust starting in grade 5. As I got older, I was taught in more detail about the horrendous acts of the Nazis. However, I never learned about how the Jews actually felt and how their friends felt during that time. I think that Number the Stars by Lois Lowry is a great book to help younger students get a better understanding of what was really happening during the Holocaust but not in a way that would scar them for life but in a way that would peak their interest.
Price elasticity = (Q2 – Q1) ÷ (P2 – P1) = (25,000 - 15,000) ÷ (15 – 1 2) = 10,000 ÷ 3 =
Price Elasticity is the measure in responsiveness of consumers to changes in the price of a product or service. The evaluation and consideration of this measure is a useful tool in firms making decisions about pricing and production, and in governments making decisions about revenue and regulation. “Price Elasticity is impacted by measurable factors that allow managers to understand demand and pricing for their product or service; including the availability of substitutes, the consumer budgets for the product or service, and the time period for demand adjustments.” The proper consideration of Price Elasticity allows managers to set pricing such that the effect on Total Revenue is predictable and adjustments to production are timely. The concept of Price Elasticity is employed in the management of commercial firms and government.
Identity and the development of identity is a prominent theme in The Alchemist by Paulo Coelho. In the Alchemist Paulo Coelho shows identity being malleable through experience. Santiago is shown to develop in his thoughts throughout the book. It can be confirmed that Santiago’s identity is developed through his thoughts, “Here I am between my flock and my treasure…he had to choose between something he had been accustomed to and something he wanted to”(Coelho 30). “…his courage is having given up his sheep and in trying to live out his Personal Legend”(Coelho 139). As Santiago lives life and takes on more knowledge his thoughts turn towards the betterment of the world, and not only himself. Realization is drawn upon and the world becomes more
... Also important is the price of complements, or goods that are used together. When the price of gasoline rises, the demand for cars falls.
In this project, we attempt to find out the causes for this price rise, the trends of the rise and the effects that this rise has had on us.
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a product's price elasticity of demand (McConnell & Brue, 2004). Market goods can be described as elastic or inelastic goods as change in quantity demanded for that good. If demand is elastic, a decrease in price will increase total revenue. Even though a lower price would generate lower sales revenue per unit, more than enough additional units would be sold to offset lower price (McConnell & Brue, 2004). In a normal market condition, a price increase leads to a decreased demand, and a price decrease leads to increased demand. However, a change in income affecting demand is more complex.