 Hello and welcome to the session. In this session we will discuss a question which says that construct index numbers from the following data for the year 2006 and 2007 taking 2005 as base here by using simple average of price-related method. And the data is given to us in which the latest commodities are given as A, B, C and D and the corresponding prices of the given commodities in 2005 in dollars are 15, 1.50, 6 and 3 and the prices in the year 2006 in dollars are 17, 2, 9 and 3.50 and the prices in the year 2007 in dollars are 19, 2.50, 9. In addition of this question we should know a result and that is by simple average its method is equal to summation of P1 over P0 into 100 the whole the number of items or commodities where P1 denotes the price index number for the current year with reference to the base year. What denotes the base year prices of all the commodities under consideration over P0 into 100 denotes the price related commodities under consideration. So this result will work out as a key idea for solving out the given question. So we start with the solution. Now first of all we will find the price index number for the year 2006 taking two of price-related method. Now let us draw a table for the given data. We have drawn a table for the given data. In the first column we have written the commodities. In the second column the corresponding prices of the commodities in the year 2005 in dollars and in the third column we have written the prices in the year 2006 in dollars. Now here is the base year for the year 2006. It means the prices in the year 2005 will be the base year prices which are denoted by P0 and the prices in the year 2006 will be the current year price of all the commodities under consideration. So this will be denoted by P1 and in the last column we will find the price relatives by using the formula P1 over P0 into 100. Now for the commodity A the price relative is equal to P1 over P0 that is 17 over 15 into 100 which is equal to 113.33. Now for commodity B the price relative is P1 over P0 that is 2 upon 1.50 into 100 which is equal to 133.33. For the commodity C the price relative is P1 over P0 that is 9 over 6 into 100 which is equal to 150 and for the commodity D the price relative is 3.50 over 3 into 100 which is equal to 116.67. For the price relatives we are getting summation of P1 over P0 into 100 the whole 33. Now using the result which is given in the key idea we can find out the price index number. The price index number P0 over 1 for taking 205 as the base here is equal to summation of P1 over P0 into 100 the whole 11 n this is equal to 513.33 upon as the number of items or commodities. So here the number of commodities is 4 this will be equal to 8.33 to the year 2000 increase in the prices of the commodities included in the index to the extent for the year 2007 taking 2000 we have drawn up table for the given data. And the first column we have written the commodities in the second column the corresponding prices of the given commodities in the year 2005 in dollars we have written the prices in the year 2007 in dollars. Now the year 2005 is the base year for the year 2007 that the prices in the year 2005 will be the base year prices which were denoted by P0. In the year 2007 are the current year prices which are denoted by the price relatives of the various commodities under consideration by using the formula P1 over P0 into 100. Now for the commodity A the price relative is P1 that is 19 over P0 that is 15 into 100 which is equal to 126.67 for the commodity B the price relative is 2.50 over 1.5 which is equal to 162 for the commodity C the price relative is 9 upon 6 into 100 which is equal to 150 and for the commodity D the price relative is 3.3 into 100 which is equal to 108.33. Now on adding all the values of the price relatives we are getting summation of P1 over P0 into 100 the whole is equal to 551.67. Now by the simple average of price relative method the price index number P01 for the year 2000 as the base year is equal to summation of P1 over P0 into 100 the whole over N 51.67 over N which is the number of commodities and here number of commodities is 4. And on calculating this is equal to 137.9175. Now we have got the price index number P01 as 137.9175 to the year 2000 and increase the commodities included half the given question and that's all for this session. We'll see you in the next session.