Question

comput the cost of living index number for the following data ?
commodities Q° P° P1
Wheat. 20 10 12
Rice. 5 30 35
Ghee. 2 20 30
sugar. 4 25 40
help me the questions and answers​

Answer 1

Answer:

The cost of living in the base city is always expressed as 100. The cost of living in the destination is then indexed against this number. So to take a simple example, if London is the base (100) and New York is the destination, and the New York index is 120, then New York is 20% more expensive than London.

Answer 2

Answer:

The base city's cost of living is always represented as 100. Then, this sum is used to index the cost of living in the destination. So, using a straightforward example, if London is the starting point (100) and New York is the final destination, then New York is 20% more expensive than London.

Explanation:

A theoretical price index called a cost-of-living index gauges the relative expense of living across time or geographical areas. It is an index that tracks variations in the cost of goods and services and allows for product substitutions as prices change. The most often used method for calculating consumer price index statistics is the aggregate expenditure approach.

Weighted Index Number is another name for Quantity Index Number. Price Index Number accounts for both the base year's and the current year's commodity prices.

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