In the calculation of the CPI,books are given greater weight than magazines if
A)consumers buy more books than magazines.
B)the price of books is higher than the price of magazines.
C)it costs more to produce books than it costs to produce magazines.
D)books are more readily available than magazines to the typical consumer.

Question

Quizplus · Accepted Answer

The CPI (Consumer Price Index) measures the average change over time in the prices paid by urban consumers for a market basket of goods and services. The weight of each item in the basket is determined by its share of total expenditure. If consumers buy more books than magazines, then books would be given a greater weight in the calculation of CPI compared to magazines. This is because the CPI is meant to reflect the consumption patterns of average consumers, and if books are more commonly purchased than magazines, they should have a greater weight in the calculation. The price of books relative to magazines, cost of production, and availability are not relevant factors in determining the weight given to books versus magazines in the CPI.

In the Calculation of the CPI,books Are Given Greater Weight