Suppose That a 20 Percent Increase in Income Increases the Quantity

question 124

Multiple Choice

Suppose that a 20 percent increase in income increases the quantity of good A demanded from 19,200 to 20,800 units. The income elasticity of demand for good A is

• A)0.05.
• B)0.8.
• C)0.4.
• D)1.2.
• E)2.0.

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Definitions:

Gamblers

Individuals who risk something of value on the outcome of an event with an uncertain result, often with the primary intent of winning additional money or goods.

Regression Toward The Mean

The tendency for extreme or unusual scores or events to fall back (regress) toward the average.

Unusual Scores

Scores that significantly deviate from the norm or average in any type of assessment, indicating atypical performance or results.

Average

A statistical measure representing the central tendency or typical value of a set of numbers, calculated as the sum of the values divided by the number of values.