Suppose the Price Elasticity of Demand for Good X Is

question 20

Multiple Choice

Suppose the price elasticity of demand for good X is 1.5.If household income increases by 25%,ceteris paribus,what is the change in quantity demanded for good X?

• A)a 37.5% increase in quantity demanded
• B)a 3.75% increase in quantity demanded
• C)a 0.375% increase in quantity demanded
• D)no change in quantity demanded
• E)There is not enough information to answer this question.

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Definitions:

McDougall

A psychologist known for his contributions to the field of social psychology and the concept of instinct theory.

Instinct

Innate drive or impulse, genetically transmitted.

Attachments

Emotional bonds formed between individuals, crucial for personal development and influencing later relationships.

Reconciliation

The process of restoring friendly relations or making one's beliefs or actions consistent with another.