Suppose That the Quantity Demanded of Good X Rises by 8

question 15

Multiple Choice

Suppose that the quantity demanded of good X rises by 8 percent when the price of good X falls by 2 percent. This information indicates that the price elasticity of demand equals

• A)4.
• B)2.50.
• C)0.25.
• D)10.
• E)There is not enough information provided to answer this question.

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Definitions:

Alpha

In statistics, it represents the level of significance, marking the threshold for rejecting the null hypothesis; in finance, it denotes the active return on an investment compared to a benchmark index.

Power of the Test

The power of the test refers to the probability that the test correctly rejects a false null hypothesis, effectively detecting an actual effect when it exists.

Unemployment Rate

The rate of individuals in the workforce who are not employed but are seeking a job.

Random Sample

A sample in which each member of a population has an equal chance of being selected, ensuring the representativeness of the sample.