Index NumbersMCQMTP June 24 Series IQuestion 3929 of 197
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Consumer price index number goes up from $110\displaystyle to $200 and the salary of a worker is also raised from $7,000\displaystyle to $12,000. Therefore, in real terms to maintain his previous standard of living he should get an additional amount of -

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option d — None of these

All Options:

  • A$8500$
  • B$10,000$
  • C$9825$
  • DNone of these

Detailed Solution & Explanation

We are given: - Initial CPI (CPI0\displaystyle CPI_0) = $110$ - Final CPI (CPI1\displaystyle CPI_1) = $200$ - Initial Salary (S0\displaystyle S_0) = $7,000$ - Revised Salary (S1\displaystyle S_1) = $12,000$ 1. **Calculate Required Salary to maintain base standard of living**: Required Salary=S0×CPI1CPI0=7000×200110≈12,727.27Required Salary=S0\displaystyle \text{Required Salary} = S_0 ×\displaystyle \times CPI1CPI0=7000\displaystyle \frac{CPI_1}{CPI_0} = 7000 ×\displaystyle \times 200110\displaystyle \frac{200}{110} ≈\displaystyle \approx 12,727.27 2. **Calculate Additional Salary needed**: Additional Salary=Required Salary−S1=12727.27−12000=727.27\displaystyle \text{Additional Salary} = \text{Required Salary} - S_1 = 12727.27 - 12000 = 727.27 Since $727.27$ is not in the options A ($8500$), B ($10,000$), C ($9825$), it corresponds to None of these. Hence, **Option D** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Index Number

A statistical device for measuring changes in the magnitude of a group of related variables (like prices or production) over time.

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More Questions from Index Numbers

In price index, when a new commodity is required to be added, which of the following index is used?

Fisher's ideal formula for calculating index number satisfies the ________

Shifted Price Index = Original Price IndexPrice Index of the year on which it has to be shifted×100\displaystyle Original Price IndexPrice Index of the year on which it has to be shifted\displaystyle \frac{\text{Original Price Index}}{\text{Price Index of the year on which it has to be shifted}} ×\displaystyle \times 100

If Laspeyres's Index Number is 250 and Paasche's Index Number is 160, then Fisher's Index number is

If ∑P0q0=240\displaystyle ∑\displaystyle \sum P_0q_0 = 240, ∑P1q0=480\displaystyle ∑\displaystyle \sum P_1q_0 = 480, ∑P0q1=600\displaystyle ∑\displaystyle \sum P_0q_1 = 600 and ∑P1q1=192\displaystyle ∑\displaystyle \sum P_1q_1 = 192, then Laspeyres's Index Number is

If ΣPnqn=249\displaystyle Σ\displaystyle \Sigma P_n q_n = 249, ΣP0q0=150\displaystyle Σ\displaystyle \Sigma P_0 q_0 = 150, ΣPnq0=145\displaystyle Σ\displaystyle \Sigma P_n q_0 = 145 and Paasche's Index Number = 150, then Fisher's Ideal Price Index Number is

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