The substitution bias refers to:
A) the failure of the Lespeyres index to capture a consumer's tendency to purchase the same bundle of goods as prices change.
B) the substitution effect is positive for a price increase.
C) the substitution effect is negative for an inferior good.
D) the failure of the Lespeyres index to capture a consumer's tendency to substitute away from goods that have become more expensive.

Question

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The substitution bias refers to the failure of the Lespeyres index to capture a consumer's tendency to substitute away from goods that have become more expensive.

The Substitution Bias Refers To