|
Grocery Prices
A Food Index 1977/78
Table 9 on page R1 contains a list of grocery prices from a
selection of shops. The weights represent spending by a typical
family.
- Complete columns 5 and 6. Find the totals for each column
to give you the total cost in 1977 and in 1978.
- Find the index number for the shopping basket in 1978,
using 1977 as the base year.
- Some items are bought monthly rather than weekly. How
could you allow for this in the index?
*A Local Survey
Prices will vary from shop to shop in your area. For each of
the items on the list in Table 9:
- Find out the cost in several different shops.
- Work out the average (mean) price for each item.
- Write -down these average prices in column 7 of Table 9.
- Which item in the survey showed greatest variation in
price?
- Write down any problems you find (e.g. types of coffee or
butter).
A Food Index for Your Family
Find out from home how much of each food on the list in Table
9 your family buys each week.
- Write down these as weights in column 9 of Table 9.
If you have done Section C2, answer questions
b, c, and d.
If you have not done Section C2, answer
questions e, f and g.
- For each item, work out the weekly cost to your family
this year and in 1977. Put these figures in columns 8 and
10 in the table.
- Add them to find the total weekly cost in 1977 and this
year.
- Find your family's food index for this year, with 1977 as
the base year.
- For each item, work out the weekly cost to your family in
1977 and 1978. Put these figures in colunms 10 and 11 of
the table.
- Add them to find the total weekly cost in 1977 and 1978.
- Find your family's food index for 1978, with 1977 as the
base year.
*Using Individual Index Numbers
In Section B4 we used individual index numbers to work out
Tracy's weighted index number. This is the method used in the
official calculations of the Retail Price Index.
If you know the index number of an item and its cost in the
base year, you can calculate its present cost.
New cost = Cost in base year x price
index/100
Thus, if the 1977 cost of bread (per week) = 105p and the 1978
index is 117:
1978 cost = 105 x 117/100
= 123p (to nearest penny)
This means 105p of bread in 1977 cost, in 1978, 123p to the
nearest penny.
| Item |
1977 cost
(pence) |
19789 index |
1978 cost
(pence) |
| Bread |
105 |
117 |
123 |
| Fish |
46 |
122 |
|
| Butter |
52 |
104 |
|
| Tea |
34 |
136 |
|
Table 5 - Weekly cost of shopping basket.
- Work out the weekly cost of the fish, butter and tea in
1978.
- What was the total weekly cost in 1977?
- Find the total weekly cost in 1978, and find the combined
price index number for these four items.
- How does the combined index compare with the four
individual indices?
| 
