Q.Define an index number. State any three features of index numbers.

Odd word = Selection Index Number.

Index numbers are classified into these standard types:

• Price index number — measures changes in the general price level.
• Quantity index number — measures changes in the volume of goods produced or consumed.
• Value index number — measures changes in total value (price multiplied by quantity).

Selection Index Number is not a recognised type of index number, so it is the odd word.

The incorrect statements about index numbers are (a) and (b), so the answer is a, b.

An index number is a statistical device that measures relative changes in an economic variable (such as prices or output) over time. Judging each statement:

• (a) 'Index number is a geographical tool' — incorrect; it is a statistical tool, not a geographical one.

• (b) 'Index numbers measure changes in the air pressure' — incorrect; air pressure is measured by a barometer, not an index number.

• (c) 'Index numbers measure relative changes in an economic variable' — correct.

• (d) 'Index numbers are specialised averages' — correct.

The correct answer is to measure the general changes in the prices of goods.

A price index number is a statistical measure that shows the average change in the prices of a group of goods and services between a base year and a current year, expressed as a percentage of the base. It captures the general movement of prices (rise or fall) rather than the price of a single item, and is widely used to study inflation and the cost of living. The other options (a geographical tool, measuring air pressure, measurement of goods) are unrelated to a price index.

The odd word is Laspeyre's Price Index Number — it is a weighted index number, while price, quantity and value index numbers are the ordinary (simple) types.

Index numbers can be classified by method of construction (simple/unweighted vs weighted) and by content (price, quantity, value):

• Price Index Number — measures change in price levels.
• Quantity Index Number — measures change in physical volume of goods.
• Value Index Number — measures change in total value (price × quantity).

These three are content-based classifications and can be built as simple index numbers. Laspeyre's Price Index Number, however, is a specific weighted method (it uses base-year quantities as weights), so it does not belong to the group of simple index-number types.

The correct option is Assertion (A) is false but Reasoning (R) is true.

An index number measures the relative change in a group of related variables (like prices) over time. It is constructed from a sample of representative items, not from every single commodity or factor in the economy — so reasoning (R) is true. Precisely because it rests on samples, an index number does not consider all factors; it gives only an approximate, representative picture. Therefore assertion (A) ('the index number considers all factors') is false. Hence A is false but R is true.