Betty and David Decide to Conduct a Survey to Observe

question 21

Multiple Choice

Betty and David decide to conduct a survey to observe people's reaction to their innovative idea for a new product. With the help of an organization that conducts primary research, the couple are able to get the responses of people from their town. The results are very encouraging and they decide to start their company. What error have they committed?

• A) hypercorrection
• B) cognitive distortion
• C) law of small numbers
• D) defense mechanism
• E) overregularization

Identify the differences between perfectly inelastic and perfectly elastic demand curves.

Calculate the price elasticity of demand using given data.

Determine the relationship between elasticity and total revenue.

Describe the characteristics of linear demand curves in terms of elasticity.

---

Definitions:

Wash Sale Rules

IRS regulations that disallow the claim of a capital loss for tax purposes if a substantially identical security is purchased within 30 days before or after the sale.

Loss Disallowed

A financial loss that cannot be deducted from taxable income as per tax regulations, often due to specific restrictions or limitations.

Personal Residence

The primary dwelling in which a person lives, often eligible for certain tax benefits, like the deduction of mortgage interest and property taxes.

Gain Recognize

Gain Recognize refers to the process of reporting the profit earned from the sale of an asset for tax purposes.