A Study of Consumers in an Area Found That as Family

question 39

Multiple Choice

A study of consumers in an area found that as family income increased from $25 000 per year to $35 000 per year and other factors held constant, the number of houses purchased increased from 7000 per year to 11 000 per year. This finding indicates an income elasticity of demand coefficient for housing over this family income range of:

• A) 0.22.
• B) 0.75.
• C) 1.33.
• D) 4.50.

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Definitions:

Market Segmentation

The process of dividing a market into distinct subsets of consumers with common needs or characteristics.

Surveys

A method of collecting data from a predefined group of respondents to gain information and insights on various topics of interest.

Hypotheses

Propositions set forth for testing, to be accepted or rejected based on evidence from statistical analysis.

Confidence Interval

A sweep of values, pulled from statistical evaluations of samples, likely to carry the value of a hidden population parameter.