Multiple Choice Questions on When the price of rice is increased by 25 percent a family reduces its consumption such that the exp........... for Employee State Insurance Corporation (ESIC) Exam Preparation

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Indian Economy - Understanding the basics of Indian economic system

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    When the price of rice is increased by 25 percent, a family reduces its consumption such that the expenditure is only 10 percent more than before. If 40 kg of rice is consumed by family before, then find the new consumption of family.

     

    38.2
     

    Incorrect Answer

    35.2
     

    Correct Answer

    36.2
     

    Incorrect Answer

    37.2

    Incorrect Answer
    Explanation:

    Suppose initially price per kg of rice is 100 then their expenditure is 4000.
    Now their expenditure is only increased by only 10% i.e – 4400.
    Increased price of rice = 125.
    So new consumption = 4400/125 = 35.2


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