Suppose That the Incomes of Buyers in a Particular Market

question 152

Multiple Choice

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

• A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
• B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
• C)Both equilibrium price and equilibrium quantity would increase.
• D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

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Definitions:

Simple Linear Regression

An analytical technique that fits a linear equation to data points to model how a dependent variable changes with one independent variable.

Variation

Variation refers to the differences or deviations among individuals or objects in a particular characteristic, within a population, species, or set of data.

Slope Coefficient

A parameter in a linear regression model that quantifies the change in the response variable for a one-unit change in the predictor variable.

Sample to Sample

Variation in statistics, refers to the differences observed between various samples drawn from the same population due to randomness.