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If the index number of prices at a place in 1994 is 250 with 1984 as base year, then the prices have increased on average
- a)250%
- b)150%
- c)350%
- d)None of these.
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
If the index number of prices at a place in 1994 is 250 with 1984 as b...
Index number is a specialized average designed to measure the change in the level of an activity or item, either with respect to time or geographic location or some other characteristic. It is described either as a ratio or a percentage. For example, when we say that consumer price index for 1998 is 175 compared to 1991, it means that consumer prices have risen by 75% over these seven years.
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If the index number of prices at a place in 1994 is 250 with 1984 as b...
Calculation of Price Increase
To calculate the percentage increase in prices, we need to use the following formula:
Percentage increase = (Current index number – Base index number) / Base index number × 100
Given that the base year is 1984 and the index number of prices in 1994 is 250, we can calculate the percentage increase as follows:
Percentage increase = (250 – 100) / 100 × 100 = 150%
Therefore, the prices have increased on average by 150%.
Explanation of the Solution
The index number of prices is a measure of the average level of prices in a given year compared to a base year. In this case, the base year is 1984, and the index number of prices in 1994 is 250. This means that the average level of prices in 1994 is 250% of the level of prices in 1984.
To calculate the percentage increase in prices, we need to compare the index number of prices in 1994 to the base index number of 100 (which represents the level of prices in 1984). We subtract the base index number from the current index number, divide the result by the base index number, and multiply by 100 to get the percentage increase.
In this case, the percentage increase is 150%, which means that the prices have increased on average by 150%. This makes option B the correct answer.
To calculate the percentage increase in prices, we need to use the following formula:
Percentage increase = (Current index number – Base index number) / Base index number × 100
Given that the base year is 1984 and the index number of prices in 1994 is 250, we can calculate the percentage increase as follows:
Percentage increase = (250 – 100) / 100 × 100 = 150%
Therefore, the prices have increased on average by 150%.
Explanation of the Solution
The index number of prices is a measure of the average level of prices in a given year compared to a base year. In this case, the base year is 1984, and the index number of prices in 1994 is 250. This means that the average level of prices in 1994 is 250% of the level of prices in 1984.
To calculate the percentage increase in prices, we need to compare the index number of prices in 1994 to the base index number of 100 (which represents the level of prices in 1984). We subtract the base index number from the current index number, divide the result by the base index number, and multiply by 100 to get the percentage increase.
In this case, the percentage increase is 150%, which means that the prices have increased on average by 150%. This makes option B the correct answer.
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If the index number of prices at a place in 1994 is 250 with 1984 as b...
Its 150% as in the base year, 100 is taken as base value
...so 250-100=150% is the required increase in prices!:)
...so 250-100=150% is the required increase in prices!:)
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If the index number of prices at a place in 1994 is 250 with 1984 as base year, then the prices have increased on averagea)250%b)150%c)350%d)None of these.Correct answer is option 'B'. Can you explain this answer?
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