When the Price of a Pizza Decreases from $14 to $12

question 96

Multiple Choice

When the price of a pizza decreases from $14 to $12,

• A)the income effect means people buy less pizza.
• B)the income effect means that the demand for pizza will not change.
• C)the income effect points out that the total purchasing power of people who buy pizza increases.
• D)None of the above answers is correct.

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Definitions:

Rejecting Null Hypothesis

The decision in hypothesis testing that the evidence is strong enough to conclude a significant effect exists.

Retaining Null Hypothesis

The decision in hypothesis testing that there is not enough evidence to reject the null hypothesis, implying the observed data does not significantly differ from what was expected.

Alpha (α)

Alpha (α) represents the level of significance in hypothesis testing, defining the threshold for rejecting the null hypothesis.

Critical Value

A critical value is a point on the distribution that represents a threshold above which significant results are considered to occur.