The substitution bias in the consumer price index refers to the:
a. substitution by consumers toward new goods and away from old goods.
b. substitution by consumers toward a smaller number of high-quality goods and away from a larger number of low-quality goods.
c. substitution by consumers toward goods that have become relatively less expensive and away from goods that have become relatively more expensive.
d. substitution of new prices for old prices in the CPI basket of goods and services from one year to the next.
The substitution bias in the consumer price index refers to the:
a. substitution by consumers toward new goods and away from old goods.
b. substitution by consumers toward a smaller number of high-quality goods and away from a larger number of low-quality goods.
c. substitution by consumers toward goods that have become relatively less expensive and away from goods that have become relatively more expensive.
d. substitution of new prices for old prices in the CPI basket of goods and services from one year to the next.
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budget line
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market demand
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transitive property of preferences
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utility
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utility function
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1. |
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The satisfaction or benefit that consumers receive from consuming goods or services.
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2. |
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A particular combination of specific quantities of goods or services |
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3. |
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Consumers can rank all conceivable bundles of goods or services |
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4. |
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If A is preferred to B, and B is preferred to C, then A is always preferred to C. |
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5. |
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Equation showing a consumerâs perception of the total utility forthcoming from consuming each bundle of goods and services. |
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6. |
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A set of consumption bundles each and every one of which provides a consumer with exactly the same level of total utility. |
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7. |
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The number of units of Y that must be given up for total utility to remain the same when one more unit of X is consumed. |
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8. |
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The addition to total utility attributable to consuming one more unit of a good, holding the consumption of all other goods constant. |
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9. |
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The line showing all bundles of goods that can be purchased at given prices if the entire income is spent. |
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10. |
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The change in the consumption of a good that would result if the consumer remained on the original indifference curve after the price of the good changes. |
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11. |
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The change in consumption of goods results strictly from the change in purchasing power after the price of a good changes. |
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12. |
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The sum of the substitution and income effects. |
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13. |
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A good for which quantity demanded varies directly with price, causing an upward sloping demand curve. |
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14. |
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A list of prices and the corresponding quantity consumers are willing and able to purchase at each price. |
