Products Quantity Consumed in 2010 Unit Price in YR 2010 (Rs) Price in YR 2021 (Rs)

Rice 6 Quintal 100 120

Wheat 8 Quintal 80 90
Bajra 1 Quintal 70 70
Dal 2 Quintal 120 115
Ghee 20 Litres 12 15
Sooji 1 Quintal 160 70

TOPIC FOR ASSIGNMENT

Solution
Formula Resulting Value Hint Same As Laspyere Price

Steps
Find Product of p1 & q0
Find Product p0 & q0
Sum Product of p1 & q0 Total Exp In Current Year
Sum Product p0 & q0 Total Exp In Base Year

COST OF LIVING INDEX Expressed in Percentage

USING AGGREGATE EXPENDITURE OR WEIGHTED AVERAGE METHOD
Sum Product of p1 & q0
----------------------------- * 100
Sum Product of p0 & q0
Same As Laspyere Price Index
Construction of Cost of Living Index Numbers

Family Budget Method Or Method of Weighted Relatives

Steps

Find Weights using value of quantities in consumed in Base Year (p0 & q0)
Find Price Relative values Hint Calculate Price Relative
Denote Price Relatives as I
Price of Current Year
--------------------------- * 100
Price of Base Year

Calculate Cost of Living Index using this Method

COST OF L Expressed in Percentage
USING FAMILY BUDGET METHOD
∑W*I
-------------- * 100
∑W*I

Use the below calculations Or

∑ p0 * q0 (p1 / p0 * 100)
---------------------------
∑ p0* q0

TOPIC FOR ASSIGNMENT

 Denote Weights As W
W= p0 * q0

Products Quantity ConsumUnit Price in YR 2010 Price in YR 2021 (Rs)

Rice 6 Quintal 100 120
Wheat 8 Quintal 80 90
Bajra 1 Quintal 70 70
Dal 2 Quintal 120 115
Ghee 20 Litres 12 15
Sooji 1 Quintal 160 70
Products Quantity CUnit Price in YR 2010 (Rs) Price in YR 2021 (Rs)
Apples 6 Quintal 125 155
Bananas 8 Quintal 70 95
Guava 1 Quintal 65 80
Oranges 2 Quintal 85 130
Mangoes 1 Quintal 40 55

Solution

Products Quantity CUnit Price in YR 2010 (Rs) Price in YR 2021 (Rs)

Apples 2 Quintal 125 155
Bananas 1 Quintal 70 95
Guava 10 Quintal 65 80
Oranges 5 Quintal 85 130
Mangoes 7 Quintal 40 55
Formula Resulting VHint Same As Laspyere Price Index

Steps
Find Product of p1 & q0
Find Product p0 & q0
Sum Product of p1 & q0 Total Exp In Current Year
Sum Product p0 & q0 Total Exp In Base Year

COST OF LIVING INDEX Expressed in Percentage

USING AGGREGATE EXPENDITURE OR WEIGHTED AVERAGE METHOD
Sum Product of p1 & q0
----------------------------- * 100
Sum Product of p0 & q0
Products Quantity CUnit Price in YRPrice in YR 2021 (Rs) Construction of Cost of Living Index Num
Apples 6 Quintal 125 155
Bananas 8 Quintal 70 95 Family Budget Method
Guava 1 Quintal 65 80 Steps
Oranges 2 Quintal 85 130
Mangoes 1 Quintal 40 55 Find Weights using value of quantities in
Find Price Relative values
Denote Price Relatives as I
Price of Current Year
---------------------------
Price of Base Year

Calculate Cost of Living Index using this

COST OF L Expressed in Percentage
USING Family Budget Method
∑W*I
-------------- * 100
∑W*I
Solution
Products Quantity CUnit Price in YRPrice in YR 2021 (Rs)
Apples 2 Quintal 125 155
Bananas 1 Quintal 70 95
Guava 10 Quintal 65 80
Oranges 5 Quintal 85 130
Mangoes 7 Quintal 40 55
tion of Cost of Living Index Numbers

dget Method Or Method of Weighted Relatives

Denote Weights As W
hts using value of quantities in consumed in Base Year (p0 & q0) W= p0 * q0
Relative values Hint Calculate Price Relative
rice Relatives as I

* 100

Cost of Living Index using this Method

Expressed in Percentage
mily Budget Method
Note
If % Increase or decrease in Price is given, then assume Price is 100.
It is Denoted as Group Index
Calculate the for working-class people cost of living index based on the available information.
The Open Market Prices for certain products In 1981 wheat was selling at an average price of Rs. 16 per 10 kg., cloth at Rs. 4
By 2021 cost of wheat rose by Rs. 8 per 10 kg., house rent by Rs. 30 per house and miscellaneous items doubled the price.
The weights of the groups in order were in the ratio 1 : 2 : 4 : 1.
The working class cost of living index number for the year 1991 with 1981 as base was 175%.
By how much cloth price rIse during the period 1981 - 1991

Solution

Steps
Tabulate as per given info And Assign Weight As Per Stated Ration W
Product Unit of Measurement Price of Base Year Price of Current Year Weighted Ratios
Wheat 16
Cloth 4
House Rent 50
Miscellaneous 20
. 16 per 10 kg., cloth at Rs. 4 per metre, house rent at Rs. 50 per house and miscellaneous items at Rs. 20 per unit.
items doubled the price.

I W*I
p1 / p0 * 100 SumProduct of WI
Compute Cost of Living Index using Family Budget Method and Weighted Average Method
Suppose a business executive was earning Rs. 2,050 in the base period. What should be his salary in the current period if his s
Calculate the index for a date when the average percentage increases in prices of items in the various groups over the base p
Food 15, Clothing 3 Rent 4, Fuel and Light 2, Miscellaneous 1 - are the assumed weights
ry in the current period if his standard of living is to remain the same?
various groups over the base period were 32, 54, 47, 78 and 58 respectively.
Note
If % Increase or decrease in Price is given, then assume Price is 100.
It is Denoted as Group Index
me Price is 100.
An enquiry into the budgets of the middle-class families of a certain city revealed that on an average the percentage expense
Food 45, Rent 15, Clothing 12, Fuel and Light 8, Miscellaneous 20. The group index numbers for the current year as compared
Calculate the Cost-of-Living Index Number for the current year.
Mr. X was getting Rs. 2,400 in the base period and Rs. 4,300 in the current year. State how much he ought to have received as
erage the percentage expenses on the different groups were :
the current year as compared with a fixed base period were respectively 410, 150, 343, 248 and 285.

h he ought to have received as extra allowance to maintain his former standard of living.
Compute Cost of Living Index using Family Budget Method and Weighted Average Method
Suppose a business executive was earning Rs. 9,999 in the base period. What should be his salary in the current period if his s
Calculate the index for a date when the average percentage increases in prices of items in the various groups over the base p
Food 7, Clothing 3 Rent 4, Fuel and Light 16, Miscellaneous 25 - are the assumed weights
ry in the current period if his standard of living is to remain the same?
various groups over the base period were 16, 34, 43, 52 and 61 respectively.
Note
If % Increase or decrease in Price is given, then assume Price is 100.
It is Denoted as Group Index
me Price is 100.