If a $100 Drop in the Price of a $10,000

question 152

Multiple Choice

If a $100 drop in the price of a $10,000 car resulted in an increase in the quantity of cars purchased from 100 to 110 and a $100 drop in the price of a $1,000 vacation rental resulted in an increase in the quantity of weekly vacation homes rented from 100 to 110, the price elasticity of demand is:

• A) greater for the car.
• B) less for the car.
• C) the same for both the car and the vacation rental.
• D) not comparable.

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Definitions:

Insight Therapy

A form of psychotherapy that aims to increase a patient's awareness of underlying motives and defenses to facilitate change.

Aversive Conditioning

A type of behavior conditioning where an undesirable behavior is paired with an unpleasant stimulus to reduce the occurrence of that behavior.

Systematic Desensitization

A behavior therapy used to gradually reduce phobia or anxiety through controlled exposure to the feared object or situation.

Harmless Stimulus

A stimulus that does not cause pain or damage and is not threatening.