An Example of the Outlet Substitution Bias in the Calculation

question 149

Multiple Choice

An example of the outlet substitution bias in the calculation of the CPI is a price increase in

• A)GPS units versus AAA map books.
• B)olive oil versus vegetable oil.
• C)a 2012 Honda Civic relative to a 2004 Honda Civic.
• D)textbooks bought through the campus bookstore relative to textbooks via Craigslist.
• E)a trip to Mexico for a couple that had previously taken vacations in Europe

---

Definitions:

Services

Intangible products such as healthcare, education, and financial advice that are consumed at the point of sale and do not result in ownership of any physical or digital goods.

Thorstein Veblen

An American economist and sociologist known for his theories on the socio-economic impacts of conspicuous consumption and leisure.

Consumption

The process by which goods and services are utilized by consumers, leading to a decrease in their quantity or quality, reflecting the end phase of economic activity.

Disposable Income

Post-income tax financial reserves set aside for households to utilize in spending and saving.