1) The price of a train ticket to London from Lanchester in      1995 is £30      1996 is £40      1997 is £50      2000 is £60    Use simple index and calculate price index for the ticket for these four years with base year 2000

1) The price of a train ticket to London from Lanchester in 

    1995 is £30 

    1996 is £40 

    1997 is £50 

    2000 is £60 

Use simple index and calculate price index for the ticket for these four years with base year 2000. (20 points) 

2. The prices and quantities of three commodities for four consecutive years are as follows: 

 Required (40 points): 

a) Explain Laspeyre's price index. 

b) Compute the Laspeyres price index for Year 4, using Year 1 as the base period. 

c) Explain Paasche's price index 

d) Compute the Paasche price index for Year 3, using Year 2 as the base period.