When the Price of Broccoli Increases Relative to Cauliflower, People

question 64

Multiple Choice

When the price of broccoli increases relative to cauliflower, people who buy fresh vegetables respond by buying more cauliflower and less broccoli. As a result, the CPI has

• A) a new price bias.
• B) a new goods bias.
• C) an outlet substitution bias.
• D) a quality change bias.
• E) a commodity substitution bias.

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Definitions:

Units of Butter

A hypothetical unit used in economics to represent production output, often used in examples discussing opportunity costs and production possibilities.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods and services that can be produced in a given period with available resources, illustrating the trade-offs and opportunity costs.

Units of Guns

A measure or quantity of firearms; colloquially, it can refer to military spending or resources in discussions of trade-offs between defense and civilian spending.

Units of Butter

A measurement used to quantify butter, typically in pounds or kilograms, often used as an example in economic theories to explain concepts like trade-offs and opportunity costs.