When the Price of a Good Increased by 6 Percent

question 113

Multiple Choice

When the price of a good increased by 6 percent, the quantity demanded of it decreased 3 percent. Most likely, this good ________ and ________.

• A)is a necessity; has poor substitutes
• B)has poor substitutes; is a luxury
• C)is a necessity; has good substitutes
• D)is a luxury; is narrowly defined
• E)is a luxury; has experienced a recent price change

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Definitions:

Test Statistic

A value calculated from sample data during a hypothesis test used to decide whether to reject the null hypothesis.

Kruskal-Wallis Test

A nonparametric test used to compare three or more groups based on ranks of data points rather than means or medians.

One-tail

One-tail refers to one-sided tests in hypothesis testing where the critical area of a distribution is one-sided, either to the right or left, focusing on a specific direction of interest.

Two-tail

A term used in statistical tests where the critical region is split between both ends of the distribution, testing for either significantly greater or lesser outcomes than the expected value.