Because There Will Always Be Some Random Factors of Demand

question 108

Multiple Choice

Because there will always be some random factors of demand that we cannot capture, which of the following is added to the regression equation?

• A)an intercept
• B)consumers' incomes
• C)the price of the good
• D)a random error term

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Definitions:

Transitive Preferences

In decision theory, a preference system where if an individual prefers option A to B and B to C, then they also prefer A to C.

Condorcet Paradox

A situation in majority voting where collective preferences can be cyclical and inconsistent, despite the individual preferences being rational and transitive.

Preferred Spending

the allocation of financial resources towards goods, services, or investments that are most favored or prioritized by an individual or entity.

City Council

The legislative body that governs a city, town, or municipality, responsible for making and enforcing local laws and policies.