In 1986,an Apple IIe Computer with 65 Kilobytes of Memory

question 120

Multiple Choice

In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1 500.Today,a $1 500 iMac computer (also made by Apple) comes with 8 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?

• A) New product bias
• B) Substitution bias
• C) Increase in quality bias
• D) Outlet bias

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Definitions:

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much revenue is contributing to covering fixed expenses and generating profit.

Unit Sold

The total number of individual items or products that have been sold by a business during a given period.

Variable Cost

Costs that change in direct proportion to changes in the levels of production or sales activities, such as materials and labor costs.

Relevant Range

The range of activity or volume over which the assumed cost behavior is valid, beyond which cost patterns and relationships may change.