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Index Numbers
An enquiry into the budgets of the middle class families in a certain city gave the following information.
|
Expenses on Item |
Food 35% |
Fuel 10% |
Clothing 20% |
Rent 15% |
Misc. 20% |
|
Price (in Rs.) in 2004 |
1500 |
250 |
750 |
300 |
400 |
|
Price (in Rs.) in 1995 |
1400 |
200 |
500 |
200 |
250 |
|
Item |
Expenses in Percentage |
Price in Rs. in 1995 |
Price in Rs. in 2004 (P1) |
 |
WR |
|
Food |
35 |
1400 |
1500 |
107.14 |
3750 |
|
Fuel |
10 |
200 |
250 |
125.00 |
1250 |
|
Clothing |
20 |
500 |
750 |
150.00 |
3000 |
|
Rent |
15 |
200 |
300 |
150.00 |
2250 |
|
Misce |
20 |
250 |
400 |
160.00 |
3200 |
|
ΣW = 100 |
ΣWR = 13450 |
Cost of living Index
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The item having the highest weight in consumer price index for industrial workers is:
In general, inflation is calculated by using:
The item having the highest weight in consumer’s price index for industrial workers is:
consumer price index measures changes in:
The wholesale price index.
D.A. paid to the workers is based on:
Why do we need an index number?
Why is it essential to have different CPIs for different categories of consumers?
What does a consumer price index for industrial workers measure?
What is the difference between a price index and a quantity index?
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