Which of the Following Statements Best Describes the Substitution Bias

question 27

Multiple Choice

Which of the following statements best describes the substitution bias in the construction of the CPI?

• A)Not taking into account that consumers alter their buying habits as new products come into being and lifestyles change, for example, the rising popularity of cell phones instead of land-line phones.
• B)Not accounting for the fact that consumers are effectively getting more product for their money because technological changes have led to improvements in quality and lower production costs over time.
• C)The failure to recognize that over time consumers alter the goods they buy, switching from relatively high priced goods toward lower-priced alternatives.
• D)The failure to capture the fact that consumers have made substitutions in their shopping habits: shifting from high-priced department stores to lower-priced discount stores.

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Definitions:

Severe Punishment

Harsh or stringent disciplinary action intended to correct behavior or serve as a deterrent to others.

Manager's Presence

The perceived availability and active engagement of a manager in the workplace, which can affect employee motivation and performance.

Reinforcement Size

Reinforcement size relates to the magnitude or amount of reinforcement given which can affect the strength and rate of the behavior it is intended to modify.

Contingent Reinforcement

A form of behavior modification that involves the delivery of a reward or punishment contingent on the occurrence of specific behaviors.