If a 10 Percent Increase in Consumer Incomes Leads to a 15

question 119

Multiple Choice

If a 10 percent increase in consumer incomes leads to a 15 percent increase in the quantity demanded for a good, the good is a _________ good with an income elasticity of________ .

• A)luxury; 0.67
• B)necessity; 1.5
• C)luxury; 1.5
• D)necessity; 0.67

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Definitions:

Random Error

Variability in data that is caused by unpredictable and unavoidable fluctuations in the measurement process.

Linearly Correlated

A statistical relationship between two variables in which changes in one variable are associated with proportional changes in another variable along a straight line.

Normally Distributed

Describes a symmetric, bell-shaped distribution of data where the mean, median, and mode are equal, prevalent in many natural phenomena.

Coefficient of Determination

A statistical measure that explains the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.