The General Linear Demand Function Below Is Used to Answer $Q _ { d } = a + b P + c M + d P _ { R }$

question 16

Multiple Choice

The general linear demand function below is used to answer questions :
$Q _ { d } = a + b P + c M + d P _ { R }$
where Q_d = quantity demanded, P = the price of the good, M = income,
$P _ { R }$ = the price of a good related in consumption.
-For the general linear demand function given above

• A) \(\Delta Q _ { d } / \Delta M = c\)
• B) d is the effect on the quantity demanded of the good of a one-dollar change in the price of the related good, all other things constant.
• C) b is the effect on the quantity demanded of the good of a one-dollar change in the price of the good, all other things constant.
• D) all of the above

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Definitions:

Generate-and-test

A problem-solving strategy that involves generating potential solutions and testing their effectiveness.

Heuristic

is a simple, efficient rule or method used to make decisions or solve problems, based on practical judgement rather than comprehensive logical analysis.

Critical Thinking

The disciplined process of actively and skilfully conceptualizing, applying, analyzing, synthesizing, and evaluating information to reach an answer or conclusion.

Deliberative Thinking

The process of carefully considering and rationalizing thoughts and options before making a decision or forming a judgment.