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

Question

Quizplus · Accepted Answer

The weights assigned to different goods and services in the CPI are based on consumer expenditures. Since consumers buy more tea than beer, tea is assigned a greater weight than beer in the calculation of the CPI.

In the Calculation of the CPI,tea Is Given Greater Weight