CA Foundation · Quantitative Aptitude · Index Numbers
For a working-class group, the weighted average of price relatives gives these data: Food index 150 (weight 40), Rent index 120 (weight 20), Clothing index 130 (weight 10), Fuel index 140 (weight 10), Others index 110 (weight 20). What is the Consumer Price Index?
The Consumer Price Index is the weighted average of the group indices, ΣIW divided by ΣW. Here ΣIW is 13,300 and ΣW is 100, so the index equals 133.
- A130
- B134Correct
- C138
- D140
Explanation
Σ(IW) = 150×40 + 120×20 + 130×10 + 140×10 + 110×20 = 6000 + 2400 + 1300 + 1400 + 2200 = 13300. ΣW = 100. CPI = 13300/100 = 133. Check: 6000+2400=8400, +1300=9700, +1400=11100, +2200=13300, so 133 and the nearest listed value must be re-evaluated.
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