Question

Calculate the index number for the year 2006 with 1996 as the base year by the weighted average of price relatives method from the following data.

Commodity	A	B	C	D	E
Weight	40	25	5	20	10
Price(Rs) per unit 1996	32	80	1	10.24	4
Price(Rs) per unit 2006	40	120	1	15.36	3

• A. 130
• B. 133.34
• C. 138.34
• D. 139.45

Answer 1

The correct option is A 130

$Commodity$	$Weight$ $w$	$Pricein1996$ $(Rs.)P_0$	$Pricein2006$ $(Rs.)P_1$	$Pricerelative$ $I=\frac{P_1}{P_0}\times 100$	$I.w$
$A$	$40$	$32$	$40$	$125$	$5000$
$B$	$25$	$80$	$120$	$150$	$3750$
$C$	$5$	$1$	$1$	$100$	$500$
$D$	$20$	$10.24$	$15.36$	$150$	$3000$
$E$	$10$	$4$	$3$	$75$	$750$
$Total$	$100$				$13000$

$\Rightarrow$ $P_{01}=\frac{\sum Iw}{\sum w}=\frac{13000}{100}=130$