Construct the cost of living index number for 2011 on the basis of 2007 from the given data using Family Budget method. | Commodities | Price 2007 | Price 2011 | Weights | | --- | --- | --- | --- | | A | 350 | 400 | 40 | | B | 175 | 250 | 35 | | C | 100 | 115 | 15 | | D | 75 | 105 | 20 | | E | 60 | 80 | 25 |

Construct the cost of living index number for 2011 on the basis of 2007 from the given data using Family Budge

Question 25 of 39

Construct the cost of living index number for 2011 on the basis of 2007 from the given data using Family Budget method.

Commodities	Price 2007	Price 2011	Weights
A	350	400	40
B	175	250	35
C	100	115	15
D	75	105	20
E	60	80	25

Tamil Nadu DgeTamil Nadu HSC (DGE) Commerce Board 2023Subjective· 3mImportance★★★★★

64% · 25/39 Questions

🔒 Locked · start free trial →

You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.

Start your 14-day free trial to unlock the full solution →

Family Budget method: $\text{CLI}=\dfrac{\sum PW}{\sum W}=\dfrac{17429.76}{135}\approx129.11$ .

In the Family Budget method the cost-of-living index is $\text{CLI}=\dfrac{\sum PW}{\sum W}$ , where $P=\dfrac{p_1}{p_0}\times100$ is the price relative and $W$ the weight.

Commodity	$p_0$	$p_1$	$P=\frac{p_1}{p_0}\times100$	$W$	$PW$
A	350	400	114.29	40	4571.43
B	175	250	142.86	35	5000.00
C	100	115	115.00	15	1725.00
D	75	105	140.00	20	2800.00

Start your 14-day free trial to unlock the full solution →

←Previous questionQ11 — For Σ p₀q₀=1974, Σ p₁q₀=3140, Σ p₁q₁=2005 find the Cost of Living Inde…→Next questionQ13 — (a) Compute (i) Laspeyre's (ii) Paasche's (iii) Fisher's Index numbers…

🎓Unlock everything free for 14 days

Unlock everything free for 14 days