If the Cross-Price Elasticity of Demand for SUVs with Respect

question 125

Multiple Choice

If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -0.10,and gasoline prices rise by 18 percent,then SUV sales should,ceteris paribus,

• A)Fall by 1.8 percent.
• B)Fall by 18 percent.
• C)Rise by 1.8 percent.
• D)Rise by 18 percent.

---

Definitions:

Overgeneralization

A cognitive distortion where a person applies one experience or rule too broadly, leading to inaccurate conclusions.

Selective Thinking

A cognitive bias that involves focusing only on information that confirms one’s preconceptions, ignoring evidence that contradicts them.

Cognitive-Behavioral

A psychological approach that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic process.

Illogical Cognitions

Refers to thoughts or thought processes that are not based on logic or sound reasoning.