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Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1?
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Given below are the data on prices of some consumer goods and the weig...
Calculating Price Index Number for the Year 1985
Introduction
Price index number is a measure of the average change in prices of a basket of goods and services over time. It is an important economic indicator that helps in measuring inflation and assessing the purchasing power of a currency. In this task, we will calculate the price index number for the year 1985 using the given data.
Methodology
To calculate the price index number for the year 1985, we will use the following formula:
Price index number = (Total cost of basket in the current year / Total cost of basket in the base year) x 100
We will first calculate the total cost of the basket for both the base year (1984) and the current year (1985) using the given data. Then, we will substitute these values in the formula to calculate the price index number for the year 1985.
Calculation
The total cost of the basket for the base year (1984) is:
Total cost of basket in 1984 = (0.50 x 2) + (0.60 x 5) + (2.00 x 4) + (1.80 x 8) + (8.00 x 1) = 30.20
The total cost of the basket for the current year (1985) is:
Total cost of basket in 1985 = (0.75 x 2) + (0.75 x 5) + (2.40 x 4) + (2.10 x 8) + (10.00 x 1) = 53.10
Substituting these values in the formula, we get:
Price index number for 1985 = (53.10 / 30.20) x 100 = 175.83
Therefore, the price index number for the year 1985 is 175.83 (Base 1984 = 100).
Conclusion
The price index number helps in understanding the changes in the prices of goods and services over time. In this task, we calculated the price index number for the year 1985 using the given data. The calculated price index number of 175.83 indicates that the prices of the basket of goods and services have increased by 75.83% in 1985 as compared to the base year 1984.
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Given below are the data on prices of some consumer goods and the weig...
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Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1?
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Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1?.
Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Given below are the data on prices of some consumer goods and the weights attached to the various items Compute price index number for the year 1985 (Base 1984 = 100) Items Unit 1984 1985 Weight Wheat Kg. 0.50 0.75 2 Milk Litre 0.60 0.75 5 Egg Dozen 2.00 2.40 4 Sugar Kg. 1.80 2.10 8 Shoes Pair 8.00 10.00 1?.
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