For each scenario, determine which challenge of measuring the true cost of livingquality improvements, new products, or
Question:
For each scenario, determine which challenge of measuring the true cost of living—quality improvements, new products, or substitution bias—a price index constructed 15 years ago would experience.
a. A typical family owns more cell phones and fewer landline telephones than it did a decade ago. The average price of a cell phone plan is lower than that of a residential line.
b. Very few households had high-speed internet connections 15 years ago. Now most households do, and the average price has fallen each year.
c. Over the last 10 years, personal computers have gotten faster and acquired new features that enable users to perform many more tasks.
Step by Step Answer:
Principles Of Economics
ISBN: 9781319330156,9781319419769
2nd Edition
Authors: Betsey Stevenson, Justin Wolfers