As an individual consumes more of a given good or service, the marginal utility of that good to the consumer likely:
a. increases

Substitution bias in the CPI refers to the fact that the CPI

A) takes into account the substitution of goods by consumers when relative prices change. B) takes no account of the substitution of goods by consumers when relative prices change. C) substitutes quality changes whenever they occur without taking account of the cost of the quality changes. D) substitutes relative prices for absolute prices of goods.

In order to understand when a model may not be accurate, which is not an important action to take?

A. Make sure assumptions made in the model are clear and accurate. B. Make sure the model all includes all possible details. C. Test the model for accuracy. D. Identify what important details were omitted when developing a model.