The outlet bias in the computation of the Consumer Price Index (CPI) refers to the tendency of consumers to shift their shopping to lower-priced stores when prices rise. This bias can cause the CPI to overstate inflation if it does not adequately account for the shift to lower-priced outlets.

Looking at the options:

a. Roxanna's refusal to shop at factory outlet stores due to their chaotic layouts does not exemplify outlet bias. Her decision is based on convenience, not price.

b. Yu-Jen's decision to shop at Costco instead of Safeway because of better prices is an example of outlet bias. She is shifting her shopping to a lower-priced store, which is exactly what outlet bias refers to.

c. Katie's preference for Whole Foods because of their organic produce selection does not exemplify outlet bias. Her decision is based on product preference, not price.

d. Diana's decision to do her holiday shopping in China to take advantage of "great deals" could be seen as a form of outlet bias, but it's not a clear example because it involves international travel, not just switching to a lower-priced local store.

So, the answer is b. Yu-Jen does most of her family's shopping at Costco instead of Safeway because the prices at Costco are more competitive.

Question

The outlet bias in the computation of the Consumer Price Index (CPI) refers to the tendency of consumers to shift their shopping to lower-priced stores when prices rise. This bias can cause the CPI to overstate inflation if it does not adequately account for the shift to lower-priced outlets.

Looking at the options:

a. Roxanna's refusal to shop at factory outlet stores due to their chaotic layouts does not exemplify outlet bias. Her decision is based on convenience, not price.

b. Yu-Jen's decision to shop at Costco instead of Safeway because of better prices is an example of outlet bias. She is shifting her shopping to a lower-priced store, which is exactly what outlet bias refers to.

c. Katie's preference for Whole Foods because of their organic produce selection does not exemplify outlet bias. Her decision is based on product preference, not price.

d. Diana's decision to do her holiday shopping in China to take advantage of "great deals" could be seen as a form of outlet bias, but it's not a clear example because it involves international travel, not just switching to a lower-priced local store.

So, the answer is b. Yu-Jen does most of her family's shopping at Costco instead of Safeway because the prices at Costco are more competitive.

Knowee AI · Accepted Answer

The outlet bias in the computation of the Consumer Price Index (CPI) refers to the tendency of consumers to shift their shopping to lower-priced stores when prices rise. This bias can cause the CPI to overstate inflation if it does not adequately account for the shift to lower-priced outlets.

Looking at the options:

a. Roxanna's refusal to shop at factory outlet stores due to their chaotic layouts does not exemplify outlet bias. Her decision is based on convenience, not price.

b. Yu-Jen's decision to shop at Costco instead of Safeway because of better prices is an example of outlet bias. She is shifting her shopping to a lower-priced store, which is exactly what outlet bias refers to.

c. Katie's preference for Whole Foods because of their organic produce selection does not exemplify outlet bias. Her decision is based on product preference, not price.

d. Diana's decision to do her holiday shopping in China to take advantage of "great deals" could be seen as a form of outlet bias, but it's not a clear example because it involves international travel, not just switching to a lower-priced local store.

So, the answer is b. Yu-Jen does most of her family's shopping at Costco instead of Safeway because the prices at Costco are more competitive.

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