Read the following table carefully and give your comments. INDEX OF INDUSTRIAL PRODUCTION BASE 1993 - 94 Industry Weight in % 1996 - 97 2003 - 2004 General index 100 130 . 8 189 . 0 MIning and quarrying 10 . 73 118 . 2 146 . 9 Manufacturing 79 . 58 133 . 6 196 . 6 Electricity 10 . 69 122 . 0 172 . 6

Index of Industrial Production Base 1993 - 94 Industry Weight in % 1996 - 97 2003 - 2004 General Index 100 130 . 8 189 . 0 Mining and quarrying 10 . 73 118 . 2 146 . 9 Manufacturing 79 . 58 133 . 6 196 . 6 Electricity 10 . 69 122 . 0 172 . 6 The following conclusions can be made by analysing the above table: The manufacturing industry has the highest weight of 79 . 58 % in the Index of Industrial Production (IIP) while mining and quarrying and electricity industries account for 10 . 73 % and 10 . 69 % respectively. The manufacturing Industry has registered the highest growth among all industrial sectors in both the years 1996 - 97 and 2003 - 04 . Mining and quarrying have registered the lowest growth rate in both years. The General Index shows that industrial increased by 30 . 8 % in 1996 - 97 as compared to 1993 - 94 and by 89 % in 2003 - 04 .

An enquiry into the budgets of the middle class families in a certain city gave the following information; Expenses on items Food 35 % Fuel 10 % Clothing 20 % Rent 15 % Misc. 20 % Price (in ₹ ) in 2004 1500 250 750 300 400 Price (in ₹ ) in 1995 1400 200 500 200 250 What is the cost of living index during the year 2004 as compared with 1995 ?

Items Weight W Price in 1995 P 0 Price in 2004 P 1 R = P 1 P 0 × 100 W R Food 35 1 , 400 1 , 500 1 , 500 1 , 400 × 100 = 107 . 14 3 , 749 . 90 Fuel 10 200 250 250 200 × 100 = 125 1 , 250 Clothing 20 500 750 750 500 × 100 = 150 3 , 000 Rent 15 200 300 300 200 × 100 = 150 2 , 250 Miscellaneous 20 250 400 400 250 × 100 = 160 3 , 200 Σ W = 100 Σ W R = 13 , 449 . 9 CPI = Σ W R Σ W = 13449 . 9 100 = 134 . 49 Cost of Living Index = 134 . 50 Thus, the price rose by 34 . 50 % during 1995 and 2004 .

EASY

11th CBSE

IMPORTANT

Earn 100

What is the difference between a price index and a quantity index?

Important Questions on Index Numbers

EASY

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 13

Is the change in any price reflected in a price index number?

MEDIUM

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 14

Can the CPI for urban non-manual employees represent the changes in the cost of living of the President of India?

HARD

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 15

The monthly per capita expenditure incurred by workers for an Industrial centre during $1980$ and $2005$ on the following items are given below. The weights of these items are $75, 10, 5, 6$ and $4$ respectively. Prepare a weighted index number for cost of living for $2005$ with $1980$ as the base.

Items	Price in $1980$	Price in $2005$
Food	$100$	$200$
Clothing	$20$	$25$
Fuel & lighting	$15$	$20$
House rent	$30$	$40$
Misc	$35$	$65$

MEDIUM

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 16

Read the following table carefully and give your comments.

INDEX OF INDUSTRIAL PRODUCTION BASE $1993 - 94$

Industry	Weight in $%$	$1996 - 97$	$2003 - 2004$
General index	$100$	$130.8$	$189.0$
MIning and quarrying	$10.73$	$118.2$	$146.9$
Manufacturing	$79.58$	$133.6$	$196.6$
Electricity	$10.69$	$122.0$	$172.6$

EASY

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 17

Try to list the important items of consumption in your family.

HARD

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 18

If the salary of a person in the base year is Rs.

4000

per annum and the current year salary is Rs.

6000

, by how much should his salary be raised to maintain the same standard of living if the CPI is

400

MEDIUM

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 19

The consumer price index for June,

2005

was

125

. The food index was

120

and that of other items

135

. What is the percentage of the total weight given to food?

MEDIUM

11th CBSE

IMPORTANT

Statistics for Economics>Chapter 7 - Index Numbers>Q 20

An enquiry into the budgets of the middle class families in a certain city gave the following information;

Expenses on items	Food $35 %$	Fuel $10 %$	Clothing $20 %$	Rent $15 %$	Misc. $20 %$
Price (in $₹$ ) in $2004$	$1500$	$250$	$750$	$300$	$400$
Price (in $₹$ ) in $1995$	$1400$	$200$	$500$	$200$	$250$

What is the cost of living index during the year $2004$ as compared with $1995$ ?

What is the difference between a price index and a quantity index?

Important Questions on Index Numbers

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