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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 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
350
40
C
100
150
65
D
80
120
45
E
60
180
20
F
90
157.5
G
300
585
b. The average prices and quantities of six items grown in Nakuru County are shown in the following table:
2021
Items
Price (Kshs/Kg)
Quantity (Kg,000)
Pineapples(A)
10
6
14
8
Oranges(B)
15
Bananas(C)
16
Beans(D)
30
12
25
Wheat(E)
21
Millet(F)
Using 2020 as base year, compute Kelly's and Fishers Price index numbers for 2021. Comment on the results.
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If you cannot think of a real example make up a fictional account which would explain this fallacy.
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