INDEX NUMBERS ASSIGNMENT Taking 1980 as the base year, compute the simple index

Question

INDEX NUMBERS ASSIGNMENT Taking 1980 as the base year, compute the simple index for the price of natural gas in 1967, 1975, 1985, U.S. Price of Natural Gas Sold to Commercial Consumers (Dollars per Thousand Cubic Feet) and 1995, 2005, and 2014 using the data in the table below: Year-8 0.73 Year-6 Year-7 0.74 ar-0 Year-1 Year-2 Year-3 Year4 Year-5 1960's 1970s 1980's 1990's 2000's 2010's 0.77 0.82 0.88 0.94 0 35164 2.04 2.23 3.39 4.00 482 559 .55 5505.08 4.77 4.63 4.83 481 4.88 5.22 .44 5.05 5.405.80 5.48 6.59 8.43 6.63 8.40 943 1134 12.00 113412.23 9.47 8.91 8.10 8.08 8.90

Explanation / Answer

Here if take 1980 as base year.

So, Index value for the price of natural price in 1980 = 100

Price of narural gas in 1980 = 3.39 Dollars per thousand Cubic Feet

so,

(i) THe simple index for the year 1967 is = Price of natural gas in 1967/ price of natural gas in 1980 * 100

= (0.74/3.39) * 100 = 21.83

(ii) THe simple index for the year 1975 is = Price of natural gas in 1975/ price of natural gas in 1980 * 100

= (1.35/3.39) * 100 = 39.82

(iii) THe simple index for the year 1985 is = Price of natural gas in 1985/ price of natural gas in 1980 * 100

= (5.50/3.39) * 100 = 162.24

(iv) THe simple index for the year 1995 is = Price of natural gas in 1995/ price of natural gas in 1980 * 100

= (5.05/3.39) * 100 = 148.97

(v) THe simple index for the year 2005 is = Price of natural gas in 2005/ price of natural gas in 1980 * 100

= (11.34/3.39) * 100 = 334.51

(vi) THe simple index for the year 2014 is = Price of natural gas in 2014/ price of natural gas in 1980 * 100

= (8.90/3.39) * 100 = 262.54

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