1) Calculate cost of basket/expenditures of Ali in year 2011.
Market basket at base period prices =80*10+55*32=2560
b) Calculate cost of basket/expenditures of Atif in year 2013.
Market basket at current period prices =95*28+130*12=4220
c) How much adjustment in ideal cost of living is required by Atif to attain the same level of utility which Ali is getting?
ideal cost of living index= 4220/2560 = 1.65
1660/2560 *100 = 64% increase in cost of living
d) Ideal cost of living index required by atif : 4220/2560=1.648
e) Graphically compare the costs of basket/expenditures borne by Ali and Atif to attain same utility.