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A family budget enquiry revealed the information that/ weights used were : Food 30, Clothing 5, Rent 8 ,Fuel 5, Miscellaneous 2. calculate cost of living index number if average increase in the price of groups over base period were 35,60,50,80,60 respectively.If a person from such group was earning Rs. 12000in base year , what should be his earnings in current period in order to maintain same standard of living at that of in base year ? |
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Answer» Given : a family budget enquiry revealed the information that/ weights used were : Food 30, Clothing 5, RENT 8 ,FUEL 5, Miscellaneous 2 average increase in the price of groups over base period were 35,60,50,80,60 respectively. To Find : a person from such group was earning Rs. 12000in base year , what should be his earnings in current period in order to maintain same STANDARD of living at that of in base year Solution: Food 30, Clothing 5, Rent 8 ,Fuel 5, Miscellaneous 2. Total = 50 Earning = 12000 Expenses on Food = (30/50) * 12000 = 7200 Expenses on Clothing = (5/50) * 12000 = 1200 Expenses on Rent = (8/50) * 12000 = 1920 Expenses on Fuel = (5/50) * 12000 = 1200 Expenses on Miscellaneous = (2/50) * 12000 = 480 New expense of Food = 7200 + (35/100)7200 = 9720 New expense of Clothing = 1200 + (60/100)7200 = 1920 New expense of Rent = 1920 + (50/100)7200 = 2880 New expense of Fuel = 1200 + (80/100)7200 = 2160 New expense of Miscellaneous = 480 + (60/100)7200 = 768 New expenses = 17748 17748 should be his earnings in current period in order to maintain same standard of living at that of in base year learn More: From the following data for the 5 groups combined Group weight ... The weekly observations on COST of living index in a certain city for ... |
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