A Good with an Income Elasticity of 2

question 5

Multiple Choice

A good with an income elasticity of 2.3 is:

• A) a luxury.
• B) inferior.
• C) a necessity.
• D) a complement.

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Definitions:

Abductive

A form of reasoning that begins with observations and seeks to find the simplest and most likely explanation.

Subgoaling

The process of breaking down a larger goal into smaller, more manageable objectives.

Planning

The cognitive process of thinking about and organizing the activities required to achieve a desired goal.

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes.