A manufacturing firm in Beirut calculates the price indices of gas and electricity as 158 and 242. It uses more gas than electricity, so the weights are 5 and 3 respectively. Calculate the weighted average of relatives (1 decimal place).
A) 189.5
B) 195.6
C) 210.5
D) 223.7

Question

Quizplus · Accepted Answer

The weighted average of relatives is calculated by multiplying each price index by its respective weight, summing these products, and then dividing by the sum of the weights. For gas: $158 \times 5 = 790$, for electricity: $242 \times 3 = 726$. The sum of these products is $790 + 726 = 1516$. The sum of the weights is $5 + 3 = 8$. Therefore, the weighted average is $1516 \div 8 = 189.5$.

A Manufacturing Firm in Beirut Calculates the Price Indices of Gas