For a Particular Good, a 3 Percent Increase in Price

question 23

Multiple Choice

For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

• A) The relevant time horizon is short.
• B) The good is a necessity.
• C) The market for the good is broadly defined.
• D) There are many close substitutes for this good.

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Definitions:

Fiscal Impact

The effect of government spending and tax policies on the economy, including changes in revenue, expenditure, and debt levels.

Illegal Immigration

The act of moving to a country in violation of its immigration laws, often to seek work, shelter, or higher quality of life.

Fiscal Burden

Refers to the financial obligations imposed on taxpayers by the government, including taxes and government spending.

Immigrant Household

A household in which the primary members have relocated from another country.