If the Price Elasticity of Demand for a Given Product

question 4

Multiple Choice

If the price elasticity of demand for a given product is 7,this means that

• A) the percentage change in quantity demanded is 7 times the percentage change in price.
• B) if quantity demanded fell by 1 percent, price would fall by 7 percent.
• C) if price was raised 7 percent, quantity demanded would fall by 7 percent.
• D) if price was raised 7 percent, quantity demanded would rise 7 percent.
• E) none of the above

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Definitions:

Confounding Variable

A factor other than the independent variable that might produce an effect in an experimental study, potentially misleading the results.

Experimental Design

The plan for a research study that includes the method for allocating participants to groups and the procedures for measuring the variables of interest.

Stimulus

An external factor or event that provokes a response or reaction, typically in a biological, psychological, or social context.

Memory Recall

The mental process of retrieval of information from the past.