If the Price Elasticity of Demand for Clothing Is 0

question 17

Multiple Choice

If the price elasticity of demand for clothing is 0.64, this implies that

• A) a 6.4 percent increase in price the price of clothing leads to a 10 percent decrease in the quantity demanded.
• B) a 10 percent increase in the price of clothing leads to a 6.4 percent decrease in the quantity demanded.
• C) if there is an increase in the price of clothing the total expenditures on clothing decreases.
• D) Both answers A and C are correct.

---

Definitions:

Confidence Interval

A range of values, derived from sample statistics, that is believed to contain the true value of an unknown population parameter with a specified level of confidence.

Margin Of Error

A statistic expressing the amount of random sampling error in a survey's results, indicating the expected range in which the true value lies.

Sample Size

The number of observations or individuals in a subset of a population selected for analysis or experimentation.

Hypothesis Test

A statistical method used to determine whether there is enough evidence in a sample of data to infer that a certain condition holds for the entire population.