In Industrially Advanced Countries, Estimates Suggest the Income Elasticity of Demand

question 116

Multiple Choice

In industrially advanced countries, estimates suggest the income elasticity of demand for health care is about

• A) +3.
• B) +6.
• C) −2.
• D) +1.

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Definitions:

Anchoring and Adjustment Bias

A cognitive bias where an initial piece of information (anchor) significantly influences subsequent judgments or decisions.

Confirmation Error

A cognitive bias involving the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Representativeness Bias

A cognitive bias where individuals make judgments about the probability of an event based on how much it resembles their existing stereotypes.

Escalating Commitment

The phenomenon where people increase their investment or involvement in a decision or action despite facing negative feedback or outcomes.