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Rahul buys 90 kg90 \text{ kg} of sugar and 55 pairs of shoes in a year. In the year 20002000, the price of a kg\text{kg} of sugar was Rs 10\text{Rs } 10 and a pair of shoes was Rs 100\text{Rs } 100. Now suppose the prices of a kg\text{kg} of sugar and a pair of shoes have gone up to Rs 15\text{Rs } 15 and Rs 120\text{Rs } 120 in the year 20052005. What is the Consumer Price Index?

Solution

✅ Correct Option: 4

Option 4: 139.29 -> The Consumer Price Index (CPI) is calculated as: CPI = (Cost of basket in current year / Cost of basket in base year) × 100. Base year (2000) cost = (90 kg × Rs 10) + (5 pairs × Rs 100) = Rs 900 + Rs 500 = Rs 1400. Current year (2005) cost = (90 kg × Rs 15) + (5 pairs × Rs 120) = Rs 1350 + Rs 600 = Rs 1950. Therefore, CPI = (1950/1400) × 100 = 139.29. This indicates that prices have increased by approximately 39.29% from 2000 to 2005. -> correct

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