Question

Following is some information regarding a town’s expenditure:

$\begin{array}{cccccc}\text{Expenses on items}& \text{Food}43\%& \text{Fuel}7\%& \text{Clothing}27\%& \text{Rent}13\%& \text{Misc}10\%\\ \text{Price (in Rs.)in 2014}& 1706& 341& 1012& 950& 347\\ \text{Price (in Rs.)in 1982}& 1004& 122& 334& 249& 200\end{array}$

What is the cost of living index of the year 2014 as compared with the year 1982?

• A. 159.5
• B. 169.5
• C. 179.5
• D. 189.5

Answer 1

The correct option is C

179.5

$\sum (W\times \frac{P_1}{P_0})\ast 100=[43\ast (\frac{1706}{1004})+7\ast (\frac{341}{122})+27\ast (\frac{1012}{334})+13\ast (\frac{950}{249})+10\ast (\frac{247}{200}\left)\right]\times 100=(73.06+19.56+81.81+49.60+17.35)\times 100=241.38\times 100P_{01}=[\sum (\frac{W\times \frac{P_1}{P_0})}{\sum W}]\times 100=\frac{(241.38\times 100)}{100}=241.38$
Thus the cost of living has become 2.4138 times in 2014 as compared with that of 1982.