ng cengage.com/static/nb/ui/index html?mbld 727532 eld-274343203&d; MINDTAP Prob
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ng cengage.com/static/nb/ui/index html?mbld 727532 eld-274343203&d; MINDTAP Problems & Applications (Ch 24) e Due Tomorrow at 1 1 PM MST Late Submission until Feb 4 at 1 1 PM MST is allowed, with a one ti ne 10% penalty to sub mitted score. Back to Assignment Attempts: Do No Harm: /1 6. Problems and Applications Q6 Which of the following situations illustrate the problem of substitution bias in the construction of the CPI? Check all that apply. Increased personal computer purchases in response to a decline in their price The introduction of air bags in cars Greater use of fuel-efficient cars after gasoline prices increase The invention of cell phones More scoops of raisins in each package of Raisin Bran Save & Contin O Type here to searchExplanation / Answer
Substitution bias as consumers have substitute cheaper goods.
2. The introduction of air bags in cars
Quality bias as quality of goods is improved.
3. Greater use of fuel efficient cars after gasoline price increase
Substitution bias as consumers have substitute cheaper goods
4. The invention of cell phones
New product bias
5. More scoops of raisins in raisin bran
Quality bias.
Item Quantity (2017) Price (2017 )$ Quantity (2018) Price (2018) $ market basket in 2017 $ market basket in ( 2018) $ Karaoke 2 50.00 2 100.00 100 200 CD 6 70.00 6 140.00 420 840 Total 520 1040 Base year 2017 CPI=( Cost of the base year market basket in the current period/Cost of the base year market basket in the base period)x100Related Questions
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