Suppose the Price of Banana Rises Over Time and Consumers

question 25

Multiple Choice

Suppose the price of banana rises over time and consumers respond by buying fewer bananas. This situation contributes to which bias in the consumer price index?

• A) substitution bias
• B) transportation bias
• C) quality bias
• D) indexing bias

---

Definitions:

Payoff

The outcome or reward from a particular action or investment, often used in the context of games, economics, and decision-making scenarios.

Strategy

A plan of action designed to achieve a long-term or overall aim, often involving the allocation of resources and decision-making processes.

Public Entertainment

Activities and events intended to amuse or interest the general public, often organized by governmental or community groups.

Dominant Strategy

In game theory, a strategy that is the best for a player to follow regardless of the strategies chosen by other players in the game.