Suppose that the prices of dairy products have risen relatively less than prices in general over the last several years. To which problem in the construction of the CPI is this situation most relevant?

Substitution Bias

Explanation:

CPI stands for Consumer Price Index which defines a measure of average prices consumer products.

Now if the prices among the category of consumer products vary not so relatively to one another then it s a bit difficult to measure CPI accurately.  

The substitution bias can create an issue in consumer Price Index that when costumers go for the subsititure option, due to infaltion a customer can buy a cheaper product rather than sticking to same old product or choice

substitution bias

Explanation:

The consumer price index measures the weighted price of an average basket of goods and how it changes as time goes by. The CPI is used to measure inflation, but one of the problems that it generally faces are substitution bias. For example, coffee has a relatively much larger weight in the CPI than tea because more people drink coffee than tea. But if the price of coffee increased severely, then some coffee consumers might decide to start drinking tea, but it will take many years for the CPI to be rearranged and show that change (the increase in tea consumption). This happens because the CPI is not adjusted every year, because its purpose is to measure price changes, but after a while this can result in problems by assigning unproper weights to certain products.

according to the song of roland, the characteristics of an ideal knight are: loyalty to the king, skilled warriors and horseman, valiant, bold, courageous, strong and proud in battle. they should be determined to fulfil their duties and willing to die to make their people safe.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.