How Do You Interpret the Estimated Value Of $\gamma$ ₁ in the Following Equation: Ln(ENT_EXP)=

question 14

Multiple Choice

How do you interpret the estimated value of $\gamma$ ₁ in the following equation: ln(ENT_EXP) = $\gamma$ ₁ + $\gamma$ ₂ (INCOME) + e
Where INCOME is annual household income (in thousands) and ENT_EXP is annual entertainment expenses?

• A)the income elasticity of entertainment
• B)when multiplied by 100 it is the percentage increase in entertainment expenses associated with an additional $1000 in income
• C)the increase in entertain expenses associated with a 1% increase in income
• D)the average of the logarithm of entertainment expenses for a household with zero income

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Definitions:

Lifestyle Adjustment

Changes made by individuals in their personal habits, living situation, or daily routines, often for health or personal effectiveness reasons.

Attitude Adjustment

The process of changing or modifying one’s attitudes or outlooks, often to become more positive or adaptive.

Emotional Regulation

The process of managing and responding to one's emotions in a healthy and adaptive way.

Stress

A condition where there's mental or emotional pressure due to challenging or negative situations.