Question

Calculate cost of living index from the following table of prices and weights.

Commodity	Weight	Price index
Food	35	108.5
Rent	9	102.6
Clothes	10	97
Fuel	7	100.9
MIscellaneous	39	103.7

• A. 104.4
• B. 106.5
• C. 126.5
• D. 128.5

Answer 1

Answer: (A)

104.4

$Commodity$	$Weight$ $w$	$Priceindex$ $I$	$I.w$
$Food$	$35$	$108.5$	$3797.5$
$Rent$	$9$	$102.6$	$923.4$
$Clothes$	$10$	$97$	$970$
$Fuel$	$7$	$100.9$	$706.3$
$Miscellaneous$	$39$	$103.7$	$4044.3$
$Total$	$\sum w=100$		$\sum I.w=10441.5$

$\Rightarrow$ Cost of living index = $\frac{\sum I.w}{\sum w}=\frac{10441.5}{100}=104.4$