The Elasticity of Demand for a Good Is -0

question 93

Multiple Choice

The elasticity of demand for a good is -0.75. A 4 percentincrease in price will cause a:

• A)3 percent decrease in quantity demanded.(True Answer )Correct
• B)5.33 percent increase in quantity demanded.
• C)5.33 percent decrease in quantity demanded.
• D)0.19 percent decrease in quantity demanded.

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Definitions:

Correlation

A measure indicating the extent to which two or more variables fluctuate together, which can be positive, negative, or zero (no correlation).

Demand Characteristics

Cues in an experiment that suggest to participants what behavior is expected, potentially influencing the outcomes of that experiment.

Falsifiable

A principle that a hypothesis or theory must be capable of being proven false in order to be considered scientific.

Testable Predictions

Hypotheses or statements that can be verified or falsified through experimentation or observation.