If the Price Elasticity of Demand for a Good Is

question 20

Multiple Choice

If the price elasticity of demand for a good is 1.4,then a 14 percent increase in the quantity demanded must be the result of

• A)a 0.1 percent decrease in the price.
• B)a 1 percent decrease in the price.
• C)a 10 percent decrease in the price.
• D)a 19.6 percent decrease in the price.

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Definitions:

Sample Size

The number of observations or data points that are collected in a sample.

Standard Deviation

A method to evaluate the level of uniformity or deviation among data points in a set.

Hourly Earnings

The amount of income earned by an individual per hour of work.

Confidence Interval

A range of values, derived from the sample statistics, that is likely to contain the value of an unknown population parameter.