If Income Decreases by 20% And, in Response, the Quantity

question 171

Multiple Choice

If income decreases by 20% and, in response, the quantity of housing demanded decreases by 14%, then the income elasticity of demand for housing is

• A) -1.
• B) -0.7.
• C) 0.7.
• D) 1.43.

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Definitions:

Gestalt Psychologist

A psychologist who studies the human mind and behavior as wholes, not by analyzing its parts, emphasizing our innate structures for perception and cognition.

Visual Perception

The ability to interpret and make sense of visual stimuli from the environment through the eyes and brain, encompassing processes such as recognition and interpretation.

Trichromatic Theory

A theory of color vision that proposes humans perceive color through the relative rates of response by three kinds of cones, each one sensitive to a different color.

Hair Cells

Sensory receptors located in the cochlea that detect sound waves and transduce them into signals that ultimately are processed in the brain as sound.