1. Telkom offers a range of telecommunication services to small businesses. A small printing business has...

 

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1. Telkom offers a range of telecommunication services to small businesses. A small printing business has used the services of TalkPlus (a value added telephone service), SmartAcess (an advertising service) and ISDN (an internet connection) for the past three years. Their annual usage and unit price for each service are given in the following table: Telkom 2009 Services Unit price TalkPlus 65 SmartAcess 35 ISDN 50 Quantity (100s Unit calls) Price 14 27 2010 16 70 40 45 Quantity(100s Unit calls) Price 18 29 2011 22 55 45 40 Quantity(100s calls) 17 24 32 a) Calculate the price relatives for 2010 and 2011 for ISDN Service. Use 2009 as the base period. Interpret the meaning of each of these indexes. b) Use the Laspeyeres weighted aggregates method (with 2009 as the base period) to calculate the composite price indexes for 2010 and 2011. By what percentage, on average, has the cost of telecommunication services for this printing company changed in 2010 and 2011 relative in 2009? c) Calculate the Paasche composite quantity indexes for 2010 and 2011, using the 2009 as the base period. d) Has the printing company's overall usage of different telecommunication services changed significantly in 2010 and 2011 relative to 2009? 1. Telkom offers a range of telecommunication services to small businesses. A small printing business has used the services of TalkPlus (a value added telephone service), SmartAcess (an advertising service) and ISDN (an internet connection) for the past three years. Their annual usage and unit price for each service are given in the following table: Telkom 2009 Services Unit price TalkPlus 65 SmartAcess 35 ISDN 50 Quantity (100s Unit calls) Price 14 27 2010 16 70 40 45 Quantity(100s Unit calls) Price 18 29 2011 22 55 45 40 Quantity(100s calls) 17 24 32 a) Calculate the price relatives for 2010 and 2011 for ISDN Service. Use 2009 as the base period. Interpret the meaning of each of these indexes. b) Use the Laspeyeres weighted aggregates method (with 2009 as the base period) to calculate the composite price indexes for 2010 and 2011. By what percentage, on average, has the cost of telecommunication services for this printing company changed in 2010 and 2011 relative in 2009? c) Calculate the Paasche composite quantity indexes for 2010 and 2011, using the 2009 as the base period. d) Has the printing company's overall usage of different telecommunication services changed significantly in 2010 and 2011 relative to 2009?

Answer rating: 100% (QA)

To solve this problem well follow the steps outlined in each question a Calculating the price relatives for 2010 and 2011 for the ISDN service using 2009 as the base period The price relative for a gi... View the full answer