4. For each scenario below, 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 many new features that enable users to perform many more tasks.

4. For each scenario below, 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 many new features that enable users to perform many more tasks.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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