In 1986, an Apple IIe computer with 65 kilobytes of memory cost around $1,500.Today, a $1,500 Apple Macbook Pro computer comes with 4 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?
A)new product bias
B)increase in quality bias
C)substitution bias
D)outlet bias
E)moore's law bias

Question

Quizplus · Accepted Answer

This illustrates an increase in quality bias, as the $1,500 price point now buys a computer with significantly more memory and capabilities than it did in 1986, demonstrating an improvement in quality that is not fully captured by standard CPI calculations.

In 1986, an Apple IIe Computer with 65 Kilobytes of Memory