Suppose That the Economy Is Growing and That Incomes Increase

question 5

Multiple Choice

Suppose that the economy is growing and that incomes increase by 14%. The demand for foreign airline travel increases by 18%. What is the income elasticity for foreign airline travel?

• A) -1.29
• B) 1.29
• C) .77
• D) 1.77

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Definitions:

Chi-square Test

A statistical procedure employed to evaluate whether a significant correlation exists between two variables that are categorical.

Minimum

The smallest or least amount allowable or possible in a given set of circumstances.

Maximum

The largest value in a given set of numbers or data points.

Range

The difference between the highest and lowest values in a dataset, offering a simple measure of data spread.