When the price of a good rises, consumers tend to purchase less of it and buy a relatively less expensive good. This behavior creates bias in the CPI, so the Bureau of Labor Statistics makes adjustments to the fixed basket of goods.

Pam is a low-risk careful driver and fran is a high-risk aggressive driver. to reveal their driver types, an auto-insurance company a. refuses to insure high-risk drivers b. charges a higher premium to owners of newer cars than to owners of older cars c. offers policies that enable drivers to reveal their private information d. uses a pooling equilibrium e. requires drivers to categorize themselves as high-risk or low-risk on the application form