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Construct the cost-of-living index number for 2020 on the basis of 2018 from the given data. Advice a donor agency on what course action to

Construct the cost-of-living index number for 2020 on the basis of 2018 from the given data. Advice a donor agency on what course action to take if the information is meant to help them make a decision on some food stipend being for a social protection program in Kenya.

Commodities

PRICE

Weights

2018

2020

A

200

400

50

B

200

350

40

C

100

150

65

D

80

120

45

E

60

180

20

F

90

157.5

60

G

300

585

100

b. The average prices and quantities of six items grown in Nakuru County are shown in the following table:

2020

2021

Items

Price (Kshs/Kg)

Quantity (Kg,000)

Price (Kshs/Kg)

Quantity (Kg,000)

Pineapples(A)

10

6

14

8

Oranges(B)

10

8

15

14

Bananas(C)

15

8

20

16

Beans(D)

30

12

25

20

Wheat(E)

40

15

60

21

Millet(F)

50

10

80

16

Using 2020 as base year, compute Kelly's and Fishers Price index numbers for 2021. Comment on the results.

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