The L in OLI theory stands for loyalty, and this factor makes it more difficult for firms to substitute foreign operations for domestic as they fear a loss of sales due to negative publicity

If the demand for a good is elastic, then

A) people do not change the quantity they demand when the price of the good changes. B) a change in price leads to a smaller percentage change in the quantity demanded. C) people substantially decrease the quantity of the good they buy if its price increases by a small percentage. D) a change in the quantity demanded is smaller than the change in price. E) the quantity demanded divided by the price exceeds 1.00.

In constructing the CPI, the BLS has to deal with commodity substitution bias, which is defined as

A) consumers' substitution of discount stores for full service stores to avoid the higher prices in the full service stores. B) consumers' substitution of cheaper goods for goods whose prices increase. C) the bias from quality changes in existing products that cause prices to increase. D) the bias from new goods being introduced that are more expensive than older goods. E) the bias that arises because the BLS changes the CPI market basket each month.